The Valuation and Allocation Assertion Relates to Which of the Following

question 27

Multiple Choice

The valuation and allocation assertion relates to which of the following audit objectives?

• A) All accounts payable on the balance sheet are real debts payable for goods received or services performed
• B) All accounts payable owed by the entity at year-end are included on the balance sheet
• C) Accounts payable are stated at the amounts owed at year-end
• D) Accounts payable are properly classified, described and disclosed in the financial report

---

Definitions:

Kahneman's Model

A psychological theory attributed to Daniel Kahneman that distinguishes between two modes of thought: fast, intuitive thinking (System 1) and slower, more rational thinking (System 2).

Mental Resources

Cognitive capacities and energies available to an individual for processing information and solving problems.

Treisman's Attenuation Theory

Treisman's Attenuation Theory is a model of selective attention that proposes a weakened strength of unattended messages rather than a complete blockage, allowing for meaningful stimuli to be processed at a lower priority.

Cocktail Party Effect

The ability to focus one's auditory attention on a particular stimulus while filtering out a range of other stimuli, as in a noisy environment.