Which of the Following Is Not True About the Auditors

question 9

Multiple Choice

Which of the following is not true about the auditors' verification of notes receivable?

• A)The interest revenue on notes receivable is usually audited by independent computation.
• B)Inspecting the notes is sufficient evidence of existence of the notes.
• C)The auditors may evaluate the collectibility of notes by inspecting credit files.
• D)Confirmation of notes payable to banks may be accomplished in conjunction with the confirmation of cash balances.

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Definitions:

Reflex Response

An automatic, involuntary reaction to a stimulus that does not involve a conscious decision.

Automatically Grasp

An instinctive or inherent understanding or recognition of concepts or situations without the need for conscious reasoning.

Objects

Material things that can be seen and touched, existing in physical reality.

Habituation

The method by which one becomes used to a stimulus through continuous exposure, resulting in a diminished reaction.