Question

Management assertions about classes of transactions are a. Occurrence. b. Completeness. c. Authorization. d. Accuracy. e. Cutoff. f. Classification. g. Presentation. For each management assertion, indicate an example of a misstatement that could occur for revenue transactions.

Answer 1

Answer:

Misstatement is referred to as errors in the presentation of financial information that could lead to wrong decision by the users

Explanation:

Occurrence : Issuing of dummy invoices for sales that did not occur            

Completeness:  Sales invoice were not fully recorded due to omission or misplacement

Authorization: Sales are not approved by the responsible manager. No authorized signature

Accuracy : Casting of sales figure on the register is not correct.

Cutoff : Sales are not recorded in the proper accounting period. January sales being recorded in the previous year account.

Classification : Grants being wrongly recorded as revenue

Presentation : Exaggerated revenue.