Question

Selecting a sample of paid notes and tracing interest to the general ledger account is a test of the PCAOB assertion for
A. accounting.
B. valuation or allocation.
C. completeness.
D. existence or occurrence.

Answer 1

Answer:

C.completeness

Explanation:

Occurrence means transactions and events that have been recorded or disclosed have  occurred and relate to the entity.Existence means whether or not accounts balances and related disclosures related Assets, liabilities and equity interests exist in the financial statements.

Completeness means there are no unrecorded transactions, events and disclosures and all transactions that have occurred has been included in the general ledger/financial statements

Valuation or  allocation means that assets, liabilities and equity interests are included in  the financial statements at appropriate amounts and any resulting valuation or allocation  adjustments are appropriately recorded and related disclosures have been appropriately  measured and described.

In this question, interest on sample of paid notes have been traced to the general ledger account, to check that whether the interest on the selected sample has been included in the general ledger and financial statements.Thus the answer shall be C.completeness