SOLVED

Learning Objective 19-4 1) Which of the following is a customary audit procedure for the verification of the legal ownership of real property? A) Examination of correspondence with the corporate counsel concerning acquisition matters. B) Examination of ownership documents registered and on file at a public hall of records. C) Examination of corporate minutes and resolutions concerning the approval to acquire property, plant, and equipment. D) Examination of deeds and title guaranty policies on hand. 2) Which of the following would offer the best evidence of owning real estate as of the balance sheet date? A) Property insurance policies B) Paid real estate tax bills C) Acquisition documents D) Cash disbursements register 3) When auditors verify accrued property taxes two audit objectives are especially significant. These are: A) completeness and accuracy. B) completeness and net realizable value. C) detail tie-in and completeness. D) accuracy and classification. 4) The balance in the property tax expense account is most similar to: A) depreciation expense. B) insurance expense. C) compensation expense. D) utilities expense. 5) The audit procedures used to verify accrued liabilities differ from those employed for the verificationof accounts payable because: A) accrued liability balances are less material than accounts payable balances. B) accrued liabilities at year end will become accounts payable during the following year. C) evidence supporting accrued liabilities is non-existent, whereas evidence supporting accounts payable is readily available. D) accrued liabilities usually pertain to services of a continuing nature, whereas accounts payable are the result of completed transactions. 6) Explain the allocation audit objective and explain why it is important to have accurate allocation within the financial statements, in relationship to Property, Plant, and Equipment 7) In the audit of accrued property taxes, the two most important balance-related audit objectives are completeness and accuracy. A) True B) False