Which of the Following Audit Procedures Is Best for Identifying

question 216

Multiple Choice

Which of the following audit procedures is best for identifying unrecorded trade accounts payable?

• A) Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period.
• B) Investigating payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports.
• C) Examining unusual relationships between monthly accounts payable balances and recorded cash payments.
• D) Reconciling vendors' statements to the file of receiving reports to identify items received just prior to the balance sheet date.

Recognize the importance of financial planning and awareness of funding sources for small businesses.

Understand the operational and legal foundations of various business structures including sole proprietorships, partnerships, and corporations.

Comprehend the significance and process of creating mission statements for businesses.

Know the challenges and failure rates of small businesses and strategies to mitigate these risks.

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Definitions:

Determination Of Income

The process of calculating the income of a business or individual, considering all sources of revenue and applicable expenses.

Nonoperating Activities

Transactions or events that fall outside the primary operations of a business, impacting the firm's financials but not related to its core operations.

Revenues

The complete revenue accrued from the core business activities through selling goods or services.

Secondary Operations

Processes that are performed after the primary manufacturing or production process to add value to a product, such as finishing, painting, or assembly.