Which of the following could test the existence assertion for payroll-related liabilities?
A)Compare items in accrued payroll taxes to the supporting payroll tax return.
B)Search for unrecorded liabilities.
C)Examine payroll tax returns to determine that the expense was recorded in the proper period.
D)Review payroll liabilities for proper classification as short- or long-term.

Question

Quizplus · Accepted Answer

To test existence assertion for payroll-related liabilities, we need to ensure that the liabilities actually exist and are recorded. One way to do this would be to compare items in accrued payroll taxes to the supporting payroll tax return, which would provide evidence that the liability actually exists and has been recorded correctly. Options B, C, and D are also important tests of payroll-related liabilities, but they focus on other aspects of the assertion such as completeness or valuation, rather than existence. Therefore, option A is the best choice for testing the existence assertion for payroll-related liabilities.

Which of the Following Could Test the Existence Assertion for Payroll-Related