One of the Balance-Related Audit Objectives of Notes Payable Balances

question 103

Essay

One of the balance-related audit objectives of notes payable balances includes Are notes payable properly aggregated and presented, and are disclosures adequate and understandable?
(presentation). List two common tests of details for notes payable which should be considered in meeting this audit objective.

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Definitions:

Salaries

Payments made to employees typically on a monthly or biweekly basis for their work or services.

Insurance

A contractual arrangement in which a company (insurer) provides compensation or coverage against losses or damages in return for payment of a premium.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditures to the appropriate period.

Prepaid Expenses

Prepaid expenses are costs for goods or services that are paid in advance of the receipt or use, recognized as assets on a balance sheet.