The Audit Objective Requiring That Existing Notes Payable Are Included

question 30

Multiple Choice

The audit objective requiring that existing notes payable are included in the notes payable schedule (completeness) is satisfied by performing the following audit procedure.

• A)Recalculate accrued interest.
• B)Examine duplicate copies of notes for details.
• C)Review the notes payable schedule to determine whether any are related parties.
• D)Obtain confirmations from creditors who have held notes from the client in the past and are not currently included in the notes payable schedule.

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Definitions:

Indirect Cost

Expenses not directly tied to the production of goods or services, such as utilities or rent.

Plant Manager's Salary

The compensation paid to the individual responsible for overseeing the operations of a manufacturing facility.

Period Costs

Expenses that are not directly tied to the production process and are instead incurred over a specific time period, such as selling, general, and administrative expenses.

Operating Costs

Expenses associated with running a business on a day-to-day basis, such as rent, utilities, and payroll, excluding costs associated with producing goods.