The purpose of the audit procedure to 'examine underlying documentation for subsequent cash payments' is to:
A) uncover payments made in a subsequent accounting period that represent liabilities at the balance sheet date.
B) uncover liabilities on the balance sheet which should not have been recorded until a subsequent period.
C) uncover cash payments recorded in a subsequent accounting period which should be recorded in this period.
D) find the documentation relating to a cash payment.

Question

Quizplus · Accepted Answer

This procedure aims to identify liabilities that existed at the balance sheet date but were paid in the subsequent period, ensuring they are recorded in the correct period.

The Purpose of the Audit Procedure to 'Examine Underlying Documentation