An Auditor Is Planning the Testing of the Accounts Payable

question 90

Multiple Choice

An auditor is planning the testing of the accounts payable balance. The auditor's main concerns should be

• A)existence and accuracy.
• B)completeness and cutoff.
• C)occurrence and cutoff.
• D)valuation and accuracy.

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Definitions:

Dishonored

Refers to the refusal or inability to pay a financial obligation when due, such as a bounced check or a default on a payment.

Notice of Dishonor

A formal notification indicating that a financial instrument, like a check or draft, has been presented for payment and refused.

Collection Bank

A financial institution involved in processing checks and payments on behalf of other banks or entities.

Collection Bank

A financial institution where checks or drafts are presented for payment.