Which of the Following Is the Primary Reason the Auditor

question 43

Multiple Choice

Which of the following is the primary reason the auditor obtains and reviews a cutoff bank statement?

• A)Verify the balance of cash per the bank's general ledger at the balance sheet date.
• B)Verify the reconciling items on the year-end bank reconciliation.
• C)Test for intentional lapping of bank transfers.
• D)Foot the cutoff bank statement for completeness.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or service activity, such as raw materials and labor hours.

Expected Total

The projected sum or outcome of a particular set of data or financial transactions over a specified period.

Dollar Sales

The total value of sales measured in monetary terms over a specific period of time.

Pretax Income

The amount of income earned by a business before taxes are deducted.