Which of the Following Audit Procedures Would Be the Most

question 18

Multiple Choice

Which of the following audit procedures would be the most correct in determining the audit objective of existence for the equipment account in the fixed asset master file?

• A) Examine vendor invoices and receiving reports.
• B) Review transactions near the balance sheet date.
• C) Recalculate vendor invoices.
• D) Examine vendor invoices for correct accounting treatment.

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Definitions:

Oil Reserve

An estimate of the amount of crude oil located in a particular economic region with the potential of being extracted and exploited.

Profit Per Barrel

The amount of financial gain realized from the sale of one barrel of a commodity, often used in the context of oil production.

Extract

To remove or take out, especially by effort or force.

Present Value

The worth today of a sum of money or cash flows expected in the future, calculated using a specified return rate.