Selecting a Sample of Paid Notes and Tracing Interest Costs

question 1

Multiple Choice

Selecting a sample of paid notes and tracing interest costs to the general ledger expense account is a test of the control objective of ________.

• A)accounting
• B)accuracy
• C)completeness
• D)validity

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Definitions:

Adjusting Entry

A log entry prepared at the termination of an accounting interval to apportion profits and outlays to the timeframe in which they really happened.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the rental period has not occurred.

Office Space

Premises used by businesses to carry out their day-to-day activities and operations.

Interest-Bearing Note

A debt instrument that requires the borrower to pay not only the principal amount but also periodic interest payments.