In Assessing Control Risk for Purchases,an Auditor Vouches a Sample

question 63

Multiple Choice

In assessing control risk for purchases,an auditor vouches a sample of entries in the accounts payable trial balance to the supporting documents.Which account assertion would this test of controls most likely support?

• A)completeness
• B)valuation and allocation
• C)existence and occurrence
• D)presentation and disclosure

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Definitions:

Financing Activities

Transactions related to raising capital and repaying investors, including issuing equity, obtaining loans, and paying dividends, reflected in a company's cash flow statement.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.

Office Equipment

Refers to the assets purchased by a business for use in its operations, such as computers, printers, and furniture.

Investing Activities

Investing activities include transactions involving the acquisition or disposal of non-current assets, such as property, plant, and equipment, or investments not related to the company's main business operations.