Answer:
The correct option is d.
Explanation:
It is given that $15,000 is considered to be material to the income statement, but $25,000 is material to the balance sheet.
Material to the income statement = $15,000
Material to the balance sheet = $25000
The auditor should set overall materiality according to the income statement.
The auditor should set overall materiality at $15,000.
Therefore the correct option is d.
Answer:
audit trails
Explanation:
Reports that trace the entry of and changes to critical data values are called <u>audit trails</u> and are essential in every system.
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1) Marginal propensity to consume (MPC) for this economy is 0.75 as it denotes the spending of the household and saving of 0.25 and the spending multiplier for this economy is
= Spending Multiplier(M)
= 1 ÷ 1 - MPC
= 1 ÷ 1-0.75
= 1 ÷ 0.25
= 4
2). Decrease in government purchases will lead to a decrease in income, generating an initial change in consumption
= -Amount of Government Decrease Purchases by × MPC
= -$250 billion × 0.75
= -$187.5 billion
3). Decrease income again, causing a second change in consumption
= Amount Decrease in Government Purchases × MPC
= -$187.5 billion × 0.75
= $140.6 billion
4).Total change in demand resulting from the initial change in government spending
= Amount of Government Decrease Purchases by × Spending Multiplier(M)
= $250 × 4
= $1,000 billion
= $1 trillion
As we can see that the income falls by $1000 billion in the end, so AD shifts to the left by the size of $1 trillion
In the question the graph is missing. Kindly find the attachment for both of question and answer
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