In Many Audits, No Substantive Tests of Transactions Are Made

question 120

Multiple Choice

In many audits, no substantive tests of transactions are made for the ________ assertion on the grounds that understatement of sales is not a concern.

• A) accuracy
• B) existence
• C) completeness
• D) none of the above

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Definitions:

Machine-Hours

An indicator of manufacturing productivity that calculates the total hours machinery is active in the production cycle.

Manufacturing Overhead

Refers to all the costs associated with the manufacturing process except for direct materials and direct labor.

Variable Manufacturing Overhead

Variable manufacturing overhead includes expenses that fluctuate with production levels, such as materials and utility costs directly associated with manufacturing.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance for manufacturing facilities.