When Auditing Accrued Property Taxes

question 49

Multiple Choice

When auditing accrued property taxes,

• A) the source for the debits to the liability account is the acquisitions journal.
• B) realizable value is an important balance-related audit objective.
• C) the ending balance in the account should be confirmed with the applicable taxing authority.
• D) the most important consideration for the auditor is that the same portion of each tax payment for the accrual that was used in the preceding year is used in the current year.

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Definitions:

Investment Account

An account held at a financial institution that contains securities, cash, and other assets held for investment purposes.

Investment Accounting Method

A set of principles for recording investments on the financial statements, depending on the level of control or influence over the invested entity.

Consolidated Figures

Financial data that combines information from separate entities into a single set of statements, used for overall analysis.