If payables turnover has increased significantly since the prior year, this is an indication that which of the following assertions for accounts payable might be violated?
A)Existence or occurrence.
B)Completeness.
C)Rights and obligations.
D)Valuation and allocation.

Question

Quizplus · Accepted Answer

If the payables turnover has increased significantly since the prior year, it could indicate that accounts payable are not being recorded completely. This would violate the completeness assertion, which requires that all recorded transactions are accurately recorded and included in the financial statements. An increase in payables turnover could suggest that some accounts payable were left out or not recorded. It would not necessarily indicate a violation of any of the other assertions.

If Payables Turnover Has Increased Significantly Since the Prior Year