During the Testing of a Year-End Bank Reconciliation,an Auditor Noticed

question 57

Multiple Choice

During the testing of a year-end bank reconciliation,an auditor noticed that the majority of checks listed as outstanding at year-end did not clear the bank until the middle of the subsequent month.Which of the following is a likely explanation?

• A)A high probability of kiting.
• B)A high probability of lapping.
• C)The year-end cash disbursements records had been closed prior to year-end.
• D)Checks were issued before year-end but not mailed until the subsequent period.

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Definitions:

Hold-in Windings

Windings in an electromagnetic device that maintain a magnetic field to keep a component, such as a relay or solenoid, in an activated state.

Cool Down Period

Cool down period refers to the time allowed for a machine, engine, or system to gradually return to ambient temperature after operation, to avoid stress or damage from abrupt temperature changes.

Cranking Time

The duration required to rotate an engine's crankshaft to start the engine.

Voltage Loss

The decrease in electrical potential within a circuit, usually resulting from the resistance or impedance present in its components.