Which of the Following Is the Most Effective Audit Procedure

question 63

Multiple Choice

Which of the following is the most effective audit procedure for verification of dividends earned on investments in marketable equity securities?

• A)Tracing deposits of dividend cheques to the cash receipts book.
• B)Comparing the amounts received with dividends received in the preceding year.
• C)Reconciling amounts received with published dividend records.
• D)Re-computing selected extensions and footings of dividend schedules and comparing totals to the general ledger.

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Definitions:

Normal Probability Distribution

A bell-shaped curve distribution characterized by its mean and standard deviation, with data symmetrically distributed around the mean.

Standard Deviation

A statistical measurement that quantifies the dispersion or spread of a set of data points around their mean.

Normal Probability Distribution

A bell-shaped curve distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence.

Discrete Probability Distributions

Probability distributions that deal with variables that have distinct, separate values.