The Audit Objective to Determine That Existing Loans Payable Are

question 107

Multiple Choice

The audit objective to determine that existing loans payable are included in the loans payable schedule (completeness) is accomplished by the following test of balances procedure:

• A) Trace the individual loans payable on the schedule to the master file.
• B) Examine duplicate copies of loan agreements for principal and interest rates.
• C) Review loans to determine whether any are related-party loans or accounts payable.
• D) Review the bank reconciliation for new loans credited directly to the bank account by the bank.

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Definitions:

Outright Collusion

An explicit agreement among competitors to fix prices, output, or trading terms in the market, which is illegal in many jurisdictions.

Ford Motor Company

An American multinational automaker that was founded by Henry Ford and incorporated on June 16, 1903.

Oligopoly

A market structure characterized by a small number of firms dominating the market, leading to limited competition and higher prices for consumers.

High Barriers

Obstacles that make it difficult for new entrants to enter a market, including high starting costs, stringent regulations, or strong competition.