The Audit Objective to Determine That Existing Notes Payable Are

question 39

Multiple Choice

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

• A)Examine balance sheet for disclosure details.
• B)Recalculate accrued interest.
• C)Review the bank reconciliation for new notes credited directly to the bank account by the bank.
• D)Examine duplicate copies of notes for principal and interest rates.

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Definitions:

Price Discrimination

The practice of selling the same product to different customers at different prices, typically based on factors like quantity purchased, customer demographic, or market location.

Robinson-Patman Act

A United States federal law aimed at preventing anticompetitive practices by producers, specifically prohibiting price discrimination among different purchasers of the same product, when the effect may harm competition.

Predatory Pricing

A strategy where a business sells products or services at a loss or extremely low prices to eliminate competition and gain market share.

Clayton Act

A piece of antitrust legislation in the United States, passed in 1914, aimed at promoting competition among businesses by prohibiting certain practices that restrict competition.