The audit objective to determine that notes payable in the schedule actually exist is verified by the test of details of balances procedure to
A) foot the notes payable list.
B) confirm notes payable.
C) recalculate interest expense.
D) examine the balance sheet for proper disclosure of noncurrent portions.

Question

Quizplus · Accepted Answer

Confirming notes payable with third-party creditors provides the most reliable evidence that these liabilities actually exist. Footing the list of notes payable, recalculating interest expense, and examining the balance sheet disclosures are all useful in assessing the completeness and accuracy of the notes payable account, but they do not directly verify the existence of the liabilities.

The Audit Objective to Determine That Notes Payable in the Schedule