If It Would Be Appropriate to Confirm Capital Stock, the Auditor

question 32

Multiple Choice

If it would be appropriate to confirm capital stock, the auditor would obtain the confirmation from:

• A)management.
• B)the board of directors.
• C)stockholders.
• D)an independent registrar.

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Definitions:

Defaulted Note

A note or loan for which the borrower has failed to make the agreed-upon payments by the due date.

Account

An accounting device used in bookkeeping to record increases and decreases of business transactions relating to individual assets, liabilities, capital, withdrawals, revenue, expenses, and so on.

Discounting Note Receivable

The process of reducing the value of a note receivable to reflect its current worth by applying an interest rate.

Endorsing Note

A legal act of signing the back of a negotiable instrument, such as a check, to assign its benefits to another party.