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NEW QUESTION 46
Statistical sampling enables the examiner to predict the occurrence rate for the population and therefore determine with some accuracy the error rate, or the potential for fraud.
- A. False
- B. True
NEW QUESTION 47
If an analytical review reveals that a company’s cost of goods sold has increased by a disproportionate amount relative to its sales, and no changes have occurred in the purchase prices, quantities purchased, or quality of products purchased, what does this most likely indicate?
- A. There were excessive sales returns during the period.
- B. Inventory has been depleted by theft.
- C. The company started recording warranty liabilities.
- D. Sales were unusually poor this year compared to last year.
NEW QUESTION 48
All of the following items appear on the balance sheet EXCEPT:
- A. Assets
- B. Cost of goods sold
- C. Liabilities
- D. Retained earnings
NEW QUESTION 49
Revenue is recognized when it is:
- A. Realized and Earned
- B. Realized and Evidenced
- C. Fictitious and Earned
- D. All of the above
NEW QUESTION 50
Which of the following is TRUE regarding accrual-basis accounting?
- A. Revenues are generally recognized when services are rendered to a customer.
- B. The accrual method focuses on tracking a company’s current cash flow.
- C. Accrual-basis accounting is simpler to use than cash-basis accounting.
- D. Expenses are recorded in the accounting system as soon as they are paid.
NEW QUESTION 51
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