In Auditing Long-Term Bonds Payable, an Auditor Most Likely Would

question 47

Multiple Choice

In auditing long-term bonds payable, an auditor most likely would

• A) Perform analytical procedures on the bond premium and discount accounts.
• B) Examine documentation of assets purchased with bond proceeds for liens.
• C) Compare interest expense with the bonds payable amount for reasonableness.
• D) Confirm the existence of individual bond holders at year-end.

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Definitions:

Volume

The quantity or amount of something, often used in context with production, sales, or trading activities.

Mixed Cost

Expenses that have both variable and fixed components, varying with the level of production or sales to some degree.

Relevant Range

The range of activity or production level within which the assumed cost behavior patterns are valid, typically influencing fixed and variable costs.

Variable Costs

Costs that change in proportion to the level of production activity or volume, such as materials and labor directly involved in production.