An Entity's Income Statements Were Misstated Due to the Recording

question 22

Multiple Choice

An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts.The auditor is most likely to detect this irregularity by ________.

• A)tracing a sample of journal entries to the general ledger
• B)evaluating the effectiveness of the internal control system policies and procedures
• C)investigating the reconciliation of control accounts with the subsidiary records
• D)performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts

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Definitions:

Alcohol

A colorless volatile liquid, chemically denoted as ethanol or ethyl alcohol, commonly found in beverages and used as a solvent or fuel.

Drugs

Substances used for medical treatment, or those that affect the mind or body when consumed.

C.S.I. Effect

The phenomenon whereby the portrayal of forensic science on crime television shows like CSI influences public perception and jury members' expectations in real-life court cases.

Real-Life Crimes

Criminal acts that have occurred in reality, often documented and sometimes adapted into various media forms such as books, films, or television shows.