Answer:
D. The income statement because it recognizes revenues at the time of sale (whether payment has been received or not) and recognizes expenses when they are incurred.
Explanation:
The income statement in accordance to the accrual basis and matching concept recognizes revenues at the time of sale (whether payment has been received or not) and recognizes expenses when they are incurred.
The business exists for a profit motive and it is the income statement that reveals whether or not the company is doing so, on a monthly, quarterly and annual basis.
Again, the listing of all categories of expenses on the income statement makes it possible to focus attention on which cost has to be brought under control to improve profitability.
The auditor should only perform tests of control when the
procedure of which are substantive alone are not enough to provide sufficient evidence
in which should be at the relevant assertion level and by that, the auditor
should perform test on the controls.
The elements surrounding a word which influence its meaning are called the CONTEXT.
Context is also defined as the set of circumstances in a communicative situation which will influence how the word is perceived, received, and understood.
Compound interest means earning interest on the interest and principal balance from previous years!
After 1 year, $200 x 1.02 = $204
After 2 years, $204 x 1.02 = $208.08
After 3 years, $208.08 x 1.02 = $212.24