In the Course of Examining the Cutoff Bank Statement for a Client,an

question 40

Multiple Choice

In the course of examining the cutoff bank statement for a client,an auditor is puzzled to discover that none of the cheques listed as outstanding on the year-end bank reconciliation has cleared the bank.This could be an indication that the client ________.

• A)is engaged in kiting
• B)has overstated the year-end balance of cash
• C)mailed the cheques to vendors after the year-end
• D)left the cash receipts journal open after the year-end.

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Definitions:

Hemoglobin

A protein in red blood cells that carries oxygen from the lungs to the rest of the body and returns carbon dioxide back to the lungs to be exhaled.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Bicarbonate Ions

Ions that act as a buffer in bodily fluids to maintain pH balance and are involved in the carbon dioxide transport and delivery system.

Carbonic Acid

A weak acid formed in solution when carbon dioxide is dissolved in water, playing a significant role in the carbon cycle and respiratory gas exchange.