Accounts payable is affected by purchase transactions that increase the account balance and payment transactions that decrease the balance, and thus, detection risk for payablassertions is affected by the inherent and control risk factors related to both these transaction classes.

Question

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This statement is true. The balance in accounts payable is affected by both purchase transactions that increase the balance and payment transactions that decrease the balance. The risk of misstatement (detection risk) in accounts payable assertions is impacted by the inherent and control risk factors associated with both of these transaction classes.

Accounts Payable Is Affected by Purchase Transactions That Increase the Account