The Purpose of the Audit Procedure to "Examine Underlying Documentation

question 61

Multiple Choice

The purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

• A)uncover liabilities on the balance sheet that should not have been recorded until a subsequent period.
• B)find the documentation relating to a cash disbursement.
• C)uncover payments made in a subsequent accounting period that represent liabilities at the balance sheet date.
• D)uncover cash disbursements recorded in a subsequent accounting period that should be recorded in that period.

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Definitions:

Illegal

Activities or actions that are forbidden by law and punishable by fines, penalties, or imprisonment.

Restrictive Covenant

A clause in a contract or deed limiting what the owner of the property can do with it.

Injunction

A court order requiring an individual or entity to do or cease doing a specific action.

Competing Business

A business that offers the same or similar products or services as another business, thereby competing for the same market share.