According to SAS No

question 50

Multiple Choice

According to SAS No. 99, auditors are required to assume that which of the following has significant risk of fraud?

• A) overstated assets
• B) understated liabilities
• C) improper revenue recognition
• D) overstated expenses

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to permanent ones, preparing the books for the next period.

Customer Refunds Payable

A liability account representing the amount of money owed by a company to customers for returned goods or cancelled services.

Net Income

The total profit of a company after all revenues and expenses, including taxes and interest, have been accounted for.

Statement Of Cash Flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.