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.

---

Definitions:

Operating Activity

Day-to-day actions and transactions that are directly related to running a business, such as sales and purchases.

Paying Wages

The act of compensating employees for their labor, typically calculated by hours worked or tasks completed.

Office Equipment

Non-consumable items used in an office setting for administrative or operational purposes, such as computers, printers, and furniture.

Measurement (Cost) Principle

An accounting principle that states assets and liabilities should be recorded at their original cost and factually supported values.