The Audit Objective Which Requires the Auditor to Determine That

question 103

Multiple Choice

The audit objective which requires the auditor to determine that loans payable on the loans payable schedule are properly classified can be tested with the following procedure:

• A) Review the notes to determine whether any are with related parties.
• B) Confirm loans payable.
• C) Examine corporate minutes for loan approval.
• D) Examine notes, minutes, and bank confirmations for restrictions.

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Definitions:

40,000 Mile Warranty

A guarantee provided, typically by a vehicle manufacturer, covering repairs and certain maintenance for up to 40,000 miles of vehicle use.

Breached Contract

Occurs when one party to a contract fails to fulfill its legal obligations as specified in the agreement, thereby violating the contract.

Private Sale

A transaction of goods or property conducted directly between individuals without the involvement of an intermediary or public auction.

Reasonable Notification

A requirement to give timely and clear information or warnings in various legal and regulatory contexts, ensuring that parties involved are properly informed.