In Searching for Unrecorded Liabilities, the Purpose of the Audit

question 8

Multiple Choice

In searching for unrecorded liabilities, the purpose of the audit procedure to "examine underlying documentation for subsequent cash disbursements" is to

• A) uncover liabilities on the balance sheet which should not have been recorded until a subsequent period.
• B) find the documentation relating to a cash disbursement.
• C) uncover payments made in a subsequent accounting period for liabilities that existed at the balance sheet date.
• D) uncover cash disbursements recorded in a subsequent accounting period which should be recorded in this period.

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Definitions:

Food Chain

A hierarchical series of organisms each dependent on the next as a source of food, illustrating the flow of energy and nutrients from one organism to another.

Laboratory Research

Systematic investigation and experimentation carried out in controlled environments to discover new knowledge or validate theories.

Primary Consumer

An organism that feeds directly on producers, such as plants or phytoplankton, in an ecosystem. Also known as herbivores.