In the Audit of Cash the Auditor Obtains a Bank

question 17

Multiple Choice

In the audit of cash the auditor obtains a bank cutoff statement primarily to:

• A)identify old outstanding checks that the client may exclude from the year-end bank reconciliation in order to misappropriate cash.
• B)obtain sufficient information to reconcile the client's bank account as of year-end.
• C)obtain direct confirmation of the client's bank balances as of year-end.
• D)test the propriety of items appearing on the client's year-end bank reconciliation.

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Definitions:

Activity-Based Costing

A method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Product Q9

A specific product or project designated by the identifier "Q9," details of which would be particular to a company's inventory or project list.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, calculated in advance of the period.

Direct Labor-Hours

The total hours of labor directly involved in the production of goods.