Unrecorded liabilities are most likely to be found during the review of which of the following documents?
A)Unpaid vendor invoices and receiving reports.
B)Shipping records.
C)Bills of lading.
D)Unmatched sales invoices.

Question

Quizplus · Accepted Answer

Unrecorded liabilities are expenses that have been incurred but not yet recorded in the accounting system. Unpaid vendor invoices and receiving reports are documents related to the purchase of goods or services where there may be a delay in recording the liability. As a result, reviewing unpaid vendor invoices and receiving reports is the best choice to identify unrecorded liabilities. Shipping records and bills of lading are documents related to the shipment of goods, and unmatched sales invoices refer to revenue recognition, which is not directly related to unrecorded liabilities.

Unrecorded Liabilities Are Most Likely to Be Found During the Review