The Auditor Uses the "Recalculation" Procedure When He

question 86

Multiple Choice

The auditor uses the "recalculation" procedure when he

• A)examines the many schedules prepared by the client
• B)examines invoices
• C)performs substantive testing
• D)checks the mathematical accuracy of documents or records electronically
• E)checks the mathematical accuracy of documents or records manually
• F)both A and B
• G)both D and E

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Definitions:

Estimated Liability

An obligation that can be reasonably estimated but whose exact value and timing are not known.

Premium Redemption

The act of repaying a bond or other security at its premium price before it reaches maturity.

Warranty Accrual Method

An accounting approach where a company estimates future warranty expenses and records them as a liability at the time the product is sold.

Warranty Expense

Costs a company expects to incur as a result of repairing or replacing products within the warranty period.