The Audit Objective to Determine That Loans Payable in the Schedule

question 6

Multiple Choice

The audit objective to determine that loans payable in the schedule exist is verified by the tests of balances procedure to:

• A) foot the loans payable list.
• B) examine the balance sheet for proper disclosure of noncurrent portions.
• C) examine duplicate copy of loans for authorisation.
• D) recalculate interest expense.

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Definitions:

Excessive Profits

Earnings that significantly exceed the norm for a industry or market, often viewed critically in terms of business ethics or competition fairness.

Equivalent Risk

A concept in finance and investments referring to two or more investment options that have the same level of risk.

Hypercompetition

A condition in the market characterized by rapid and intense competitive moves, where advantages are quickly eroded.

Intermittent Profits

Earnings that are not consistent or regular, often fluctuating due to various external or internal factors.