An Auditor Compares Information on Canceled Checks with Information Contained

question 20

Multiple Choice

An auditor compares information on canceled checks with information contained in the cash disbursements journal. The objective of this test is to determine that

• A) Recorded cash disbursement transactions are properly authorized.
• B) Proper cash purchase discounts have been recorded.
• C) Cash disbursements are for goods and services actually received.
• D) No discrepancies exist between the data on the checks and the data in the journal.

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Definitions:

Monthly Interest Rate

It's the interest rate applied each month on loans, savings, or investments, calculated by dividing the annual interest rate by 12.

Probability Of Default

The likelihood that a borrower will be unable to meet its debt obligations.

EOQ

Economic Order Quantity, a formula used to determine the ideal quantity of inventory to minimize total costs related to ordering, receiving, and holding inventory.