The Erroneous Inclusion of Transactions That Should Properly Be Recorded

question 83

Multiple Choice

The erroneous inclusion of transactions that should properly be recorded as assets into accounts such as repairs expense, lease expense, or supplies is a common client error. The auditor is most lkely to evaluate the likelihood of these types of misclassifications in conjunction with:

• A) obtaining an understanding of internal control.
• B) the tests of controls.
• C) the tests of transactions.
• D) the tests of details of balances.

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Definitions:

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Documents that track the financial activities and condition of a business, including income statements, balance sheets, and cash flow statements.

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