Einancial I. Conceptually, management makes assertions about the statements. (1) Define what is meant by management assertions (2) How does the concept of management assertions help the auditor in auditing an entity's financial statements? DEscs II. Indicate the most applicable of each of the following assertions. Use only ONE letter for each itenm Assertions about Classes of Transactions and Events: D. Classification E. Cutoff B. Completeness C. Accuracy Assertions about Account Balances F. Existence G. Completeness H. Valuation and Allocation I. Rights and Obligations Assertions about Presentation and Disclosure J. occurrence and Rights and obligations K. CompletenesS L. Ac M. Classification and Understandability and Valuation Items Company management says that the company owns assets included in the accounting records 2. All inventory purchases that took place have been recorded. 3. Sales shipped FOB destination, still in transit at the end of year 1, are excluded from revenue for year 1. 4. Management states that probable losses from all lawsuits and claima against the company have been recognized in the financial statements determining depreciation expense accounting principles used 5. Management complies with accounting principles in 6. All sales that have been recorded, took place 7. The financial statement footnotes include the significant 8. No footnotee are included with the financial statements. Answers (USE ONLY ONE LETTER) 6