The auditor is most likely to verify the liability account 'accrued commissions payable' in conjunction with the:
A) verification of contingent liabilities.
B) review of sales transactions.
C) examination of trade accounts payable.
D) review of disbursements after year-end.

Question

Quizplus · Accepted Answer

Accrued commissions payable is a liability account that records the amount of commissions earned by sales employees but not yet paid. Therefore, it is more likely that the auditor will verify this account in conjunction with the review of sales transactions. This will help to ensure that the commissions are accurately recorded and reflected in the financial statements. Verification of contingent liabilities and examination of trade accounts payable are unrelated to the accrued commissions payable account. While the review of disbursements after year-end may involve commission payments, it is unlikely to be the primary reason for verifying this liability account.

The Auditor Is Most Likely to Verify the Liability Account