An Audit Team Would Most Likely Verify the Interest Earned

question 10

Multiple Choice

An audit team would most likely verify the interest earned on bond investments by:

• A)vouching the receipt and deposit of interest checks.
• B)confirming the bond interest rate with the issuer of the bonds.
• C)recomputing the interest earned on the basis of face amount, interest rate, and period held.
• D)testing internal controls relevant to cash receipts.

---

Definitions:

Erosion

The process by which soil, rock, and other surface material are worn away by wind, water, or other natural agents.

Combustion

A chemical reaction that occurs when a substance reacts with oxygen to produce heat and light, commonly seen in burning.

Carbon Dioxide

A clear, scentless gas that is a byproduct of burning carbon-based substances and the respiration process, which is utilized by plants during the process of photosynthesis.

Terrestrial

Terrestrial refers to organisms or environments that are land-based, as opposed to aquatic or marine.