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    Auditing and Assurance Services Study Set 5
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    Exam 5: Planning, Understanding the Entity and Assessing Business Risk
  5. Question
    An Unexplained Decrease in the Ratio of Gross Profit to Sales
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An Unexplained Decrease in the Ratio of Gross Profit to Sales

Question 1

Question 1

Multiple Choice

An unexplained decrease in the ratio of gross profit to sales may suggest which of the following possibilities?


A) Unrecorded sales.
B) Merchandise purchases charged to selling and general expense.
C) Fictitious sales.
D) Unrecorded purchases.

Correct Answer:

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