Assume That the Auditors Are Concerned About Disbursement Transactions That

question 11

Multiple Choice

Assume that the auditors are concerned about disbursement transactions that have been recorded for improper amounts.Which procedure(s) would possibly identify these transactions? $\begin{array}{|l|c|c|}\hline \text { Item } & \begin{array}{c}\text { Trace from source } \\\text { documents to journals }\end{array} & \begin{array}{c}\text { Vouch from journal } \\\text { to source documents }\end{array} \\\hline \text { A } & \text { No } & \text { No } \\\hline \text { B. } & \text { No } & \text { Yes } \\\hline \text { C. } & \text { Yes } & \text { No } \\\hline \text { D. } & \text { Yes } & \text { Yes } \\\hline\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Cost of Capital

The necessary yield a business must secure on its ventures to sustain its valuation in the marketplace and raise capital.

Cost of Equity

The return that investors require for their investment in a company, essentially the amount a firm must pay to retain its equity investors.

MIRR

Modified Internal Rate of Return; a financial metric that adjusts the traditional IRR to account for differences in reinvestment rates and financing costs.

Internal Rate

Commonly known as the Internal Rate of Return (IRR), it represents the interest rate at which the net present value of all the cash flows (both positive and negative) from a project or investment equals zero.