ACC 415 - Chapter 15

Réussis tes devoirs et examens dès maintenant avec Quizwiz!

Stock certificate book

A book with serially numbered stock certificates with attached stubs

A registrar/transfer agent system relating to capital stock is most likely used by:

A large, publicly traded company

Paid-in capital in excess of par

An account for stock issurance proceeds in excess of book value

Debenture bond

An unsecured bond, dependent upon the general credit of the issuer

An audit program for the examination of the retained earnings account should include a step that requires verification of the:

Authorization for both cash and stock dividends

A primary responsibility of a registrar of capital stock is to:

Avoid any over issuance of stock

When no independent stock transfer agent is employed and the corporation issues its own stocks and maintains stock records, canceled stock certificates should:

Be defaced to prevent reissuance and attached to their corresponding stubs

Company A does not employ an independent stock transfer agent, but rather issues its own stock and maintains its stock records. When outstanding shares are transferred from one holder to another, the certificate of the selling shareholder should be:

Canceled (generally by perforation) and attached to the certificate book

An auditor who is auditing for acquired treasury stock will normally expect to see an entry in which journal?

Cash disbursements

Stock transfer agent

Charged with maintaining detailed records of shareholders and handling purchases and sales of stock

In auditing long-term debt, an auditor would be most likely to:

Compate interest expense with the long-term debt amount of reasonableness

The auditor can best verify a client's bond sinking fund transactions and year-end balance by:

Confirmation with the bond trustee

Stockholders ledger

Contains a separate record for each stockholder

For audit purposes, a corporation's articles of incorporation are normally

Copied and placed in the permanent file

The primary reason for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense presented in the financial statements is to:

Detect unrecorded liabilities

Which of the following is not a primary objective in the audit of interest-bearing debt?

Establish the legality of outstanding debt

The auditors' program for the examination of long-term debt should include steps that require the:

Examination of any bond trust indenture

Which of the following procedures is least likely in the audit of capital stock?

Examine all outstanding stock certificates for completeness

Corporations maintain either a stock certificate book or a stockholders' ledger. True/False

False

Dividends should be authorized by the stockholders of the corporation. True/False

False

Long-term liabilities that are maturing must always be classified as a current liability. True/False

False

The auditors are required to confirm bond holdings directly with the bondholders. True/False

False

The auditors should determine that the issuance of bonds was approved by the company's stockholders. True/False

False

When the auditors obtain an understanding of internal control for the financing cycle documentation will frequently include a written description as well as a(n):

Internal control questionnaire

An auditor obtains evidence of stockholders' equity transactions for a publicly traded company by reviewing the entity's:

Minutes of board of directors meetings

In which of the following accounts would one expect a related party transaction to be easiest to detect?

Notes payable

For a large publicly traded client the auditors' examination of capital stock accounts will not normally include:

Reconciliation of a stock certificate book with the general ledger

For a corporation that does not utilize the services of an independent registrar and stock transfer agent, which of the following represents a weakness in internal control over stock issuance?

Stock certificagtes are signed immeddiately upon receipt from the printer

Which of the following statements is correct relating to common stock certificates of a publicly traded company that uses the services of a transfer agent?

Stock certificates often are not issued in today's electronic environment

Changes in capital stock accounts should normally be approved by:

The board of directors

Bond transactions are normally confirmed with:

The bond trustee

Internal control over bonds payable is best when:

The company utilizes the services of a bond trustee

Which of the following is an auditor most likely to confirm from the transfer agent and registrar?

Total shares of stock issued

Which of the following most likely would approve the issuance of notes payable?

Treasurer

For a continuing client, the auditors will often find that audit time required for capital stock is small in relation to the dollars recorded in the accounts. True/False

True

Registered bondholders receive periodic interest payments without any action on their part. True/False

True

The auditors generally refer to provisions in the partnership agreement when auditing the allocation of partnership income. True/False

True

The formal documentation creating bond indebtedness is called the indenture. True/False

True

When an independent registrar and stock transfer agent is used, it is likely that the auditor will confirm the number of shares outstanding with those parties rather than the shareholders. True/False

True

During an audit of a publicly-held company, the auditors should obtain written confirmation regarding debenture transactions from the:

Trustee

The auditor's program to examine interest-bearing debt most likely will include steps that require:

Vouching borrowing and repayment transactions

During its fiscal year, a company issued, at a discount, a substantial amount of first-mortgage bonds. When performing audit work in connection with the bond issue, the independent auditor should:

review the minutes for authorization


Ensembles d'études connexes

Addiction Class NCLEX Questions 10/10

View Set

Late antique Europe and Byzantine art form function context and content

View Set

Ch 57 Practicum & the Job Search

View Set

Skin Structure and Function - Dermis

View Set