Question 1: Which of the following internal control procedure that is usually applied to accounts payable?
A. Periodic confirmation of accounts payable
B. Mailing statements to vendors detailing their account
C. Periodic aging of accounts payable
D. Reconciliation of vendor statements with accounts payable
Question 2: The auditors' search for unrecorded liabilities is completed:
A. During an interim period
B. At the balance sheet date
C. Subsequent to the balance sheet date
D. At any time during the examination
Question 3: Internal control over bonds payable is best when:
A. The company utilized the services of a bond trustee.
B. The company segregates approval from issuance of the bonds.
C. Bonds are countersigned by two officers
D. Bonds are serially numbered
Question 4: The audit approach for acquired treasury stock will normally include:
A. Confirmation with shareholders
B. Inspection of certificates
C. Inspection of cash receipts entries
D. Recompilation of all gains and losses
Question 5: Changes in capital stock accounts should normally be approved by:
A. The board of directors
B. The audit committee
C. The stockholders
D. The president