Fh l Hill-lil- FIIJIJ-HHUEJ-lr ll.\" UALEHHJAJII UL LHHLH tJU PUAIJILHI we considered broad "accounting systems" involving the Sales cycle AND Inrentory Observation to illustrate the direction cm testing involving the test for overstatement or understatement. Esquirements: 1. consider THREE anncENT pieces of the sales cycle [do-NUT use \"Sales Order"] and discuss the proper direction of testing for Sales for OVERstatement. 2. In a physical inventory observation. discuss the proper direction when taking test counts to test for OVEastatement of inventory. 3. The double-entry accounting system conceptually can be used to gain audit eficiencies. Use \"journal entries' and explain how [A] Accounts receivable is tested for understatement by gathering evidence about another account; and {El how a liability is tested for overetatement by gathering evidence about another account. 4. What type of evidence is used to test sales for overstatement? 1. Sales for UVERstatement 2. Physical Inventory testing for DVERstatement as. Journal entries E Discussion. Accounts receivable Eor UNDERS tat lament . BE. Journal entries a Discussion. A liability for OVERstatement. 4. Type of evidence: Sales for GUERstatement