You are planning a substantive test of details to determine if all recorded sales revenue transactions are supported by a sales contract with the customer and a shipping document. What is the appropriate population to select your sample for this test?

Question

BlackTom AI · Accepted Answer

The question asks about selecting the appropriate population for a substantive test of details to verify that all recorded sales revenue transactions are supported by a sales contract with the customer and a shipping document.
Option 1: 'Sales contracts with the customer' would be a population if you were testing whether every contract exists or matches a recorded sale, but this test focuses on the sales transactions that are already recorded, not the contracts themselves as the base population.
Option 2: 'Shipping documents' could be used to test cutoffs or shipment existence, yet the objective here is to confirm that recorded sales are supported by both a contract and a shipping document, which points to starting with the recorded transactions themselves rather than the supporting documents alone.
Option 3: 'Recorded sales transactions' is the correct population for a substantive test of details aiming to ensure each recorded sale has appropriate supporting documentation (contract and shipping), since you are examining the details of what has already been recorded.
Option 4: 'Cash collections from the customer' pertains to cash receipt testing and not to the completeness or accuracy of the recorded sales transactions or their supporting documents, making it an incorrect population for this test.
In summary, the substantive test of details is typically applied to the accounting records themselves to verify that each recorded transaction is properly supported, which aligns with selecting 'Recorded sales transactions' as the population.

ACCT:4100:0001 Fall25 Exam 2- Requires Respondus LockDown Browser

You are planning a substantive test of details to determine if all recorded sales revenue transactions are supported by a sales contract with the customer and a shipping document. What is the appropriate population to select your sample for this test?

View Explanation

Log in for full answers

Similar Questions

You are concerned that your audit client has misclassified operating expenses as asset acquisitions, similar to the WorldCom fraud. What population will you use to select a sample to detect the potential misclassifications?

You are planning a substantive test for purchase transactions to determine if all purchase invoices from suppliers represent items that were actually received by the Receiving Department. What is the appropriate population to select your sample for this test?

You are planning a substantive test for purchase transactions to determine if all inventory items received are recorded on the books. What is the appropriate population to select your sample to begin this test?

The auditor uses monetary-unit sampling (MUS) to conduct substantive tests for an account. The desired confidence level in selecting the sample is 95%, the upper misstatement limit (UML) is $11,200, and the auditor’s tolerable misstatement is $14,000. Which of the following is a true statement?

As a result of tests of controls, an auditor incorrectly assessed control risk as high and inappropriately followed the substantive strategy for the financial statement audit. This assessment occurred because

One way to test all items in a population of occurrences for a particular control activity is to use testing, which is now possible due to the emergence of ADA.

ADA has a major impact on transaction level control testing by enabling the auditor to more easily Blank ______.

Question at position 15 As you need to be more confident in your sample, the sample size should:Stays the same.Increase or decrease based on the judgement of the internal audit function.Decrease. Increase.

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler