Question

1. Investing in marketable securities interfaces with the :

a. investment cycle and cash balance

b. revenue cycle and expenditure cycle

c. production cycle and revenue cycle

d financing cycle and revenue cycle

e. financiang cycle and expenditure cycle.

2. The inspecting and counting of securities on hand is ordinarily performed simultaneously with the auditor's :

a. observing of the inventory counting

b. inspecting of major addtions to plant assets.

c. confirming of securities held by others.

d. counting of cash.

e. recalculating of loan interest.

3. List of accounts below here were considered as major cash account, except :

a. General checking accounts.

b. Cash management accounts.

c. Impress payroll accounts.

d. Petty cash accounts.

e. Cash flow

4. The specific audit objective for the audit of investment allrecorded investments are owned by the reporting entity is :

a. existence or occurrence assertion.

b. completeness assertion

c. right and obligation

d. valuation or allocation

e. presentation or disclosure

choose the correct answer and explain it !

Answer 1

1. b is correct

money received in form of dividend and interest. This is part of the revenue cycle

money paid for purchase of securities purchase. This is part of the expenditure cycle

a is incorrect - investment cycle includes capital expenditures and money usually put in long term financial assets. cash balance would be money left after all receipts and disbursals

c is incorrect - production cycle is incorrect as the money would be paid to convert raw material into finished good

d is incorrect - financing cycle would be money raised by company and not invested by it