Which of the Following Procedures Would the Auditor Perform in Testing

question 38

Multiple Choice

Which of the following procedures would the auditor perform in testing the completeness assertion for accounts payable?

• A)Examine a sample of cash disbursements made after year-end to determine whether the disbursements were for goods acquired in the previous year.
• B)Reconcile vendor's statements with the accounts receivable trial balance.
• C)Examine production equipment for useful lives.
• D)Gather purchase orders immediately previous to and subsequent to year-end.

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Definitions:

Equilibrium Quantity

The amount of goods or services supplied and demanded at the equilibrium price, where the quantity demanded equals the quantity supplied.

Number of Firms

The total count of businesses operating within a market or industry, a key factor in determining market structure and competition levels.

Downsloping Demand

A situation where demand decreases as the price increases, typically illustrated by a downward sloping demand curve.

Upsloping Supply

This describes a supply curve that slants upward from left to right, indicating that the quantity of goods supplied increases as the price rises.