In Connection with the Audit of an Issue of Long-Term

question 76

Multiple Choice

In connection with the audit of an issue of long-term bonds payable,the audit team should

• A) Determine whether bondholders are persons other than owners, directors, or officers of the company issuing the bond.
• B) Calculate the effective interest rate to see if it is substantially the same as the rates for similar issues.
• C) Decide whether the bond issue was made without violating state or local law.
• D) Ascertain that the client has obtained the opinion of counsel on the legality of the issue.

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Definitions:

Infant Mortality Rate

The number of infant deaths per 1000 live births. (A child is an infant during his or her first two years of life.)

Fertility Rate

The typical amount of offspring a female member of a population gives birth to during her life.

Developed Countries

Nations with advanced technological infrastructure, high standards of living, and comprehensive systems for healthcare, education, and economic activity.

Human Population

Refers to the number of humans living in a specific area or globally, including its growth, density, and distribution.