In Auditing Long-Term Debt, an Auditor Would Be Most Likely

question 28

Multiple Choice

In auditing long-term debt, an auditor would be most likely to:

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

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Definitions:

Revenues

Income generated from normal business operations and includes discounts and deductions for returned merchandise.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership stake of the owners.

Revenues

The total income generated from normal business operations and other activities over a specific time period.

Expenses

The costs incurred in the process of generating revenue, including operational, administrative, and sales costs.