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Assertions about account balances at year-end typically include _______.A. existence, completeness, and allocationB. existence, completeness, and rights and obligationsC. existence, occurrence, and cutoffD. accuracy, valuation, and occurrence

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Answer:

The correct answer is letter "B": existence, completeness, and rights and obligations.

Explanation:

Assertions are management claims about certain matters regarding a company. Those claims are raised as a result of auditing the firm's financial statements. There are three (3) types of assertions which are:

  • Transaction-level assertions: accuracy, classification, completeness, cutoff, and occurrence.
  • Account balance assertions: completeness, existence, rights and obligations, and valuation.
  • Presentation and disclosure assertions: accuracy, completeness, occurrence, rights and obligations, and understandability.

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