As Part of Accounts Payable Testing, an Auditor Reviews Cash

question 52

Multiple Choice

As part of accounts payable testing, an auditor reviews cash payments made post balance date. This is done mainly to gain evidence about the:

• A) valuation and allocation assertion.
• B) rights and obligations assertion.
• C) completeness assertion.
• D) existence assertion.

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Definitions:

Foreign Exchange Gain

A gain resulting from changes in exchange rates affecting the value of assets, liabilities, or transactions denominated in foreign currencies.

Income Statement

A financial statement that reports a company's financial performance over a specific period, illustrating revenues, expenses, and net income or loss.

Interest-Bearing Note

A debt instrument that pays interest to the lender over the term of the loan.

Put Option

A financial contract giving the option holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.