The Audit Objective That Requires That Existing Notes Payable Be

question 59

Multiple Choice

The audit objective that requires that existing notes payable be included in the notes payable schedule is satisfied by performing which of the following audit procedures?

• A) confirm notes payable
• B) trace the total of the notes payable schedule to the general ledger
• C) review the notes payable schedule to determine whether any are related parties
• D) obtain confirmations from creditors who have held notes from the client in the past and are not currently included in the notes payable schedule

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Definitions:

Long-term

Describes assets, liabilities, or financial investments that are expected to be held or have a life span greater than one year.

Contract Rate

The agreed-upon rate specified in a contract that determines the amount of interest to be accrued on financial instruments such as loans or bonds.

Face Value

The nominal or dollar value printed on a security or financial instrument, such as a bond or stock.

Interest Paid

The amount paid by a borrower to a lender for the privilege of borrowing money, typically expressed as an annual percentage rate.