The Audit Objective to Determine That Notes Payable in the Schedule

question 18

Multiple Choice

The audit objective to determine that notes payable in the schedule exist is verified by the tests of balances procedure to

• A)foot the notes payable list.
• B)confirm notes payable.
• C)recalculate interest expense.
• D)examine the balance sheet for proper disclosure of noncurrent portions.

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Definitions:

Manufacturing Overhead

Expenses related to the manufacturing process that are not directly tied to specific products, such as salaries of supervisory staff and factory maintenance.

Direct Materials

Materials that are traceable to the production of specific goods or services and included in the cost of those goods or services.

Direct Labour

is the cost associated with workers who are directly involved in the production of goods or services, such as wages for assembly line workers.

Prime Cost

The sum of direct materials and direct labor costs that are directly attributable to the production of a product.