[go: up one dir, main page]
Scribd
Upload
881 views2 pages

Ap Prob 8

This document discusses audit procedures related to verifying accounts payable, accrued liabilities, long-term debt, and other liabilities. It indicates that unpaid bills and unmatched invoices are most likely to contain unrecorded liabilities. Reviewing post-balance sheet cash disbursements and reconciling vendor statements to receiving reports are effective ways to identify unrecorded payables. When verifying inventory, auditors focus on examining purchase invoices. Auditors can delegate test footing payables ledgers but should not delegate reconciling statements or preparing payable schedules. Reviewing note renewals near the balance sheet date verifies existence and completeness assertions. Auditing long-term debt involves examining indentures and assets purchased with bond proceeds. Accr

Uploaded by

jhobs
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
881 views2 pages

Ap Prob 8

This document discusses audit procedures related to verifying accounts payable, accrued liabilities, long-term debt, and other liabilities. It indicates that unpaid bills and unmatched invoices are most likely to contain unrecorded liabilities. Reviewing post-balance sheet cash disbursements and reconciling vendor statements to receiving reports are effective ways to identify unrecorded payables. When verifying inventory, auditors focus on examining purchase invoices. Auditors can delegate test footing payables ledgers but should not delegate reconciling statements or preparing payable schedules. Reviewing note renewals near the balance sheet date verifies existence and completeness assertions. Auditing long-term debt involves examining indentures and assets purchased with bond proceeds. Accr

Uploaded by

jhobs
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

1.

Unrecorded liabilities are most likely to be found during the review of which of the
following documents?
a. Unpaid bills c. Bills of lading
b. Shipping records d. Unmatched sales invoices
2. Which of the following audit procedures is best for identifying unrecorded trade accounts
payable?
a. Reviewing cash disbursements recorded subsequent to the balance sheet date to
determine whether the related payables apply to the prior period.
b. Investigating payables recorded just prior to and just subsequent to the balance
sheet date to determine whether they are supported by receiving reports.
c. Examining unusual relationships between monthly accounts payable balances and
recorded cash payments.
d. Reconciling vendors’ statement to the file of receiving reports to identify items
received just prior to the balance sheet date.
3. In verifying debits to perpetual inventory records of a nonmanufacturing firm, the auditor
is most interested in examining the purchase
a. Journal b. Requisitions c. Orders d. Invoices
4. Which of the following procedures relating to the examination of accounts payable could
the auditor delegate entirely to the client’s employees?
a. Test footings in the accounts payable ledger
b. Reconcile unpaid invoices to vendors statements
c. Prepare a schedule of accounts payable
d. Mail confirmations for selected account balances
5. An auditor’s purpose in reviewing the renewal of a note payable shortly after the balance
sheet date most likely is to obtain evidence concerning management’s assertions about
a. Existence or occurrence c. Completeness
b. Presentation and disclosure d. Valuation or allocation.
6. An auditor’s program to audit long term debt should include steps that require
a. Examining bond trust indentures
b. Inspecting the accounts payable subsidiary ledger.
c. Investigating credits to the bond interest income account.
d. Verifying the existence of the bondholders.
7. In an audit of bonds payable, an auditor expects the trust indenture to include the
a. Auditee’s debt-to-equity ratio at the time of issuance.
b. Effective yield of the bonds issued.
c. Subscription list.
d. Description of the collateral
8. In auditing long-term bonds payable, an auditor most likely will
a. Perform analytical procedures on the bond premium and discount accounts.
b. Examine documentation of assets purchased with bond proceeds or liens
c. Compare interest with the bond payable amount for reasonableness.
d. Confirm the existence of individual bondholders at year-end.
9. The audit procedures used to verify accrued liabilities differ from those employed for the
verification of accounts payable because
a. Accrued liabilities usually pertain to services of a continuing nature while accounts
payable are the result of completed transactions
b. Accrued liability balances are less material than accounts payable balances.
c. Evidence supporting accrued liabilities in nonexistence while evidence supporting
accounts payable is readily available.
d. Accrued liabilities at year-end will become accounts payable during the following
year.
10. The auditor is most likely to verify accrued commissions payable in conjunction with the
a. Sales cutoff test
b. Verification of contingent liabilities
c. Review of post balance sheet date disbursements
d. Examination of trade accounts payable

You might also like