The Auditor Obtains and Reviews a Cutoff Bank Statement Primarily

question 10

Multiple Choice

The auditor obtains and reviews a cutoff bank statement primarily to

• A)verify the balance of cash per the bank's general ledger at the balance sheet date.
• B)verify the reconciling items on the year-end bank reconciliation.
• C)test for intentional lapping of bank transfers.
• D)foot the cutoff bank statement for completeness.

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Definitions:

Realized Gain

The profit made from the sale of an asset, which becomes evident upon completion of the transaction.

Fair Value

The estimated market price of an asset or liability, assuming knowledgeable, willing parties in an arm's length transaction.

Readily Marketable

Assets that can be quickly converted into cash with minimal impact on their price.

Management's Intent

The intentions or planned actions of a company's management, often related to investments, operations, or financial decisions.