Exam 22: Audit of the Capital Acquisition and Repayment Cycle

Audit schedules for most of the accounts in the capital acquisition and repayment cycle include the beginning balance, a list of transactions that occurred in the account, and the ending balance.

The three most important balance-related audit objectives for notes payable are existence, realizable value, and accuracy.

One of the balance-related audit objectives of notes payable balances includes Are notes payable properly aggregated and presented, and are disclosures adequate and understandable? (presentation). List two common tests of details for notes payable which should be considered in meeting this audit objective.

Assessed control risk and results of substantive tests of transactions are normally unimportant for designing tests of details of balances for which of the following accounts?

If loans require significant restrictions on the activities of the company, they must be disclosed in the footnotes.

Which of the following is an accurate statement regarding the audit of the capital acquisition and repayment schedule?

Most closely held corporations have numerous transactions during the year for capital stock accounts.

An auditor is determining whether an issuance of notes payable for cash was correctly recorded. Her or his best course of action would be to

Public companies whose stock is listed on a stock exchange must employ an independent registrar.

If a company employs a capital stock registrar and/or transfer agent, the registrar or agent, or both, should be requested to confirm directly to the auditor the number of shares of each class of stock