Two Months Before the Year-End the Bookkeeper Erroneously Recorded the Receipt

question 24

Multiple Choice

Two months before the year-end the bookkeeper erroneously recorded the receipt of a long-term bank loan by a debit to cash and a credit to sales. Which of the following is the most effective procedure for detecting this
Type of misstatement?

• A) Analyse bank confirmation information.
• B) Analyse the notes payable journal.
• C) Prepare a year-end bank transfer schedule.
• D) Prepare a year-end bank reconciliation.

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Definitions:

Marginal Productivity

The additional output that is produced by employing one more unit of a factor of production, holding all other factors constant.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor of production.

Market Wage Rate

The prevailing rate of compensation offered for labor in a specific market or industry, determined by supply and demand.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or input, used in decision-making about resource allocation.