Other transaction cycle

Question 1

Purpose of reviewing renewal of note payable right after BS date

Answer 1

Understandability and classification

Question 2

Proper amount of depreciation are expensed

Answer 2

Valuation, allocation and accuracy

Question 3

In auditing long terms bonds payable

Answer 3

Compare interest expense with bonds payable for reasonables

Question 4

It performing test conserning granting of stock option

Answer 4

Trace to autorization of board of directors

Question 5

Are there restrictions on retained earnings from loans, lows

Answer 5

Classificaton and understandability

Question 6

When company’s stock maintained by agent of register auditor obtaines confirmation

Answer 6

Number of shares issued and outstanding

Question 7

Auditors programme of examing long term debt

Answer 7

Examinig bond trust indenturies

Question 8

Auditor’s plan to examine long term debt would include

Answer 8

Correlating interest expense with outstanding debt

Question 9

Auditor would include in questionnaire of notes payable

Answer 9

Direct borrowings on notes payable authorized by board of directors

Question 10

Auditing PPE which test supports exstense and occurence

Answer 10

Vouch a sample of purchase to invoice and report

Question 11

Auditor planning test of details on client’s debt transaction what test he would performe

Answer 11

Review board minutes for evidence of new agreements

Question 12

To test valuation assertion related to stockholder’s equity

Answer 12

Analyze retaining earnings account

Question 13

Auditing PPE Auditor reviews notes to check f depreciation method and useful life are properly disclosed

Answer 13

Completness

Question 14

Vouching stock related transactions to board minutes

Answer 14

Existence and occurrence

Question 15

In testing PPE Auditor examines new additions listed on an analysis. This procedure is to obtain evidence concerning management’s assertion of

Answer 15

Existence

Question 16

Auditors purpose in reviewing the renewal of a note payable shortly after the BS date is to obtain evidence conserving

Answer 16

Understandability and classification

Question 17

In auditing long term bonds payable auditor most likely would

Answer 17

Compare interest expense with bond payable amount for reasonabless

Question 18

In determining the effectiveness of entities internal control relating to the occurrence assertion for payroll transactions, an auditor most likely would inquire about and

Answer 18

Observe the segregation of duties concerning personel responsibilities and patrol disbursement

Question 19

When there are numerouse PPE transactions and auditor assess control risk at low level usually performs

Answer 19

Test of controls and limited test of current year PPE

Question 20

An auditor’s program to examine long term debt should include steps that require

Answer 20

Examining bond trust indentures

Question 21

Which question would auditor include on internal control questionnaire for notes payable?

Answer 21

Are direct borrowing on notes payable authorized by the board of director?

Question 22

Property acquisitions that are missclassified as maintenance expense would most likely be deted:

Answer 22

Investigation of variances within formal budgeting system

Question 23

In order to test valuation assertion related to the clients stockholders equity, the auditor may complete which of the following procedures:

Answer 23

Analyze the clients retained earnings account by reviewing propriety of direct entries

Question 24

While auditing PPE Auditor reviews the notes to FS to determine if the depreciation methods and estimated useful life are disclosed. What assertion?

Answer 24

Completeness