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:

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, is a publication by the American Psychiatric Association that provides standardized criteria for the classification and diagnosis of mental disorders.

Criterion

A principle or standard by which something can be judged or decided.

Hypersexual Disorder

A condition characterized by excessive preoccupation with sexual fantasies, urges, or behaviors that is distressing or disruptive to daily functioning.

Diagnostic Criteria

A set of standardized guidelines used to diagnose disorders, including substance use disorders, based on specific symptoms and the duration of those symptoms.