The purpose of the audit procedure to "trace receiving reports issued before year-end to related vendors' invoices" is to determine that all
A)merchandise received is included in accounts payable.
B)merchandise received is included in inventory.
C)merchandise was received.
D)invoices have been paid.

Question

Quizplus · Accepted Answer

The purpose of tracing receiving reports to vendors' invoices is to ensure that all merchandise received before year-end is included in accounts payable. This helps to ensure that the financial statements reflect a complete and accurate picture of the company's liabilities. It is not necessarily related to inventory, whether merchandise was received, or whether invoices have been paid.

The Purpose of the Audit Procedure to "Trace Receiving Reports