An Auditor Should Trace Bank Transfers for the Last Part

question 806

Multiple Choice

An auditor should trace bank transfers for the last part of the audit period and first part of the subsequent period to detect whether:

• A) The cash receipts journal was held open for a few days after the year-end.
• B) The last checks recorded before the year-end were actually mailed by the year-end.
• C) Cash balances were overstated because of kiting.
• D) Any unusual payments to or receipts from related parties occurred.

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Definitions:

Short Form Truth Table

A method used in logical analysis to determine the validity of logical statements by systematically examining all possible truth values of its components in a concise format.

Atomic Sentences

Simple, indivisible sentences in logic that assert a basic proposition without the use of connectives or complex structures.

Truth Values

The valuation of a statement as either true or false in logic.

Short Form Truth Table

A method of using truth tables that focuses only on the relevant combinations of truth values that could affect the outcome.