The Most Reliable Evidence from Confirmations Is Obtained When They

question 41

Multiple Choice

The most reliable evidence from confirmations is obtained when they are sent

• A) as close to the balance sheet date as possible.
• B) at various times throughout the year to different segments of the sample, so that the entire sample is representative of account balances scattered throughout the year.
• C) several months before the year-end, so the auditor will have adequate time to perform alternate procedures if they are required.
• D) at various times throughout the year to the same group in the sample, so that the sample will not have a time bias.

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Definitions:

Materials Cost

The expense associated with the raw materials and components required for manufacturing a product.

Processing Department

A division within a factory where a specific stage of production is carried out.

Total Cost Transferred

The entire sum of costs that have been allocated from one department or process to another within an organization.

Processing Department

A specialized unit within a manufacturing facility where a specific type of processing or production stage is carried out.