During the Testing of a Year End Bank Reconciliation, an Auditor

question 88

Multiple Choice

During the testing of a year end bank reconciliation, an auditor noticed that the majority of checks listed as outstanding at year-end had not cleared the bank. Which of the following is a likely explanation?

• A) A high probability of kiting.
• B) A high probability of lapping.
• C) The year-end cash disbursements records had been closed prior to year-end.
• D) The year-end cash disbursements records had been held open past year-end.

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Definitions:

Saccharide

A saccharide is a sugar or a substance made up of sugar molecules, ranging from simple monosaccharides like glucose to complex polysaccharides like starch.

Term

A word or phrase used to describe a specific concept or a period of time.

Sugar

A general term for sweet-tasting, soluble carbohydrates, many of which are used in food.

Monosaccharides

Simple sugars that are the most basic form of carbohydrates, serving as energy sources and building blocks for more complex sugars.