The Balance-Related Audit Objective to Determine That Cash in Bank

question 129

Multiple Choice

The balance-related audit objective to determine that cash in bank is properly presented and disclosed can be met through which of the following tests of details of balances?

• A) Trace outstanding cheques to subsequent period bank statement.
• B) Examine minutes, loan agreements, and the bank confirmation for restrictions on the use of cash and compensating balances.
• C) Foot the outstanding cheque list and deposits in transit.
• D) Test for kiting.

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Definitions:

Insulated

Protected from external influences or impacts, often used in the context of economies or markets that are shielded from global fluctuations.

Mutual Interdependence

A situation in oligopolistic markets where the actions of one firm affect the actions of other firms, leading to strategic planning and decision-making.

Price Policy

A strategy adopted by a company or government to set the sale price of goods or services, often to regulate market behavior or achieve economic objectives.

Market Power

The ability of a company or group to manipulate or control prices and output in a market.