Auditors may use positive or negative forms of confirmation requests. An auditor most likely will use
a. The positive form to confirm all balances regardless of size
b. The negative form for small balances
c. A combination of the two forms, with the positive form used for trade balances and the negative form for other balances
d. The positive form when the assessed risk of material misstatement is acceptably low and the negative form when it is unacceptably high
Ans: b. The negative form for small balances
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Which of the following would be classified in a different major section of a balance sheet from the others?
a. Capital stock b. Common stock subscribed c. Stock dividend distributable d. Stock investment in affiliate
Will, Luke, and Katherine who are siblings purchased five acres of land as joint tenants in 1986. In 1990, Luke sold his interest to Troy with the consent of Will and Katherine. In 1994, Will died. Which of the following is TRUE?
A) Will's interest in the land is transferred to his spouse by reason of survivorship. B) Will's interest in the land is transferred to Katherine by reason of survivorship. C) Will's interest in the land is transferred to Luke and Katherine by reason of survivorship. D) Will's interest in the land is transferred to Katherine and Troy by reason of survivorship. E) Will's interest in the land is transferred to his estate by reason of survivorship.