6) One of the following is a true statement about independent audit reclassifica

Q: 6) One of the following is a true statement about independent audit reclassifica

In accounting, the word reclassification is often used to describe moving an amount from one general ledger account to another. For example, if an expense was charged to marketing supplies instead of administrative supplies, the correcting entry might read: To reclassify from marketing supplies to administrative supplies. TRUE (C)

ID: 2483805 • Letter: 6

Question

6) One of the following is a true statement about independent audit reclassification entries:

A) Audit reclassification entries must be posted to the client’s general ledger before the independent auditor can conclude his/her field work.

B) An audit reclassification entry can involve any combination of debits and credits to balance sheet and/or revenue and expense accounts.

C) An audit reclassification entry can never change the client’s earnings.

D) Audit reclassification entries can only involve balance sheet accounts.

Explanation / Answer

In accounting, the word reclassification is often used to describe moving an amount from one general ledger account to another. For example, if an expense was charged to marketing supplies instead of administrative supplies, the correcting entry might read: To reclassify from marketing supplies to administrative supplies.

TRUE (C)

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6) One of the following is a true statement about independent audit reclassifica

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