The Auditor Should Trace Bank Transfers Using a bank

question 23

Multiple Choice

The auditor should trace bank transfers using a bank transfer schedule primarily to determine if:

• A) cash has been understated due to kiting.
• B) cash has been understated due to lapping.
• C) cash has been overstated due to kiting.
• D) cash has been overstated due to lapping.

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Definitions:

Price

The cash amount forecasted, required, or paid out for acquiring something.

Normal Good

A product or service for which demand increases as consumer income increases, and vice versa, demonstrating a direct relationship between income and demand.

Income

The financial gain earned by an individual or entity, typically through wages, investments, or other forms of revenue.

Demand

The desire to own goods or services combined with the ability and willingness to pay for them.