In an audit test of recorded interest expense and accrued interest,the auditor was able to detect that the recorded interest expense was higher than the calculations showed.This may indicate
A) A failure to accrue interest occurred.
B) Interest payments are in default.
C) Interest payments were charged to another account.
D) Interest was paid on an unknown debt or unrecorded liability.

Question

Quizplus · Accepted Answer

The discrepancy suggests that interest was paid on a debt that is not recorded in the books, indicating an unrecorded liability or unknown debt.

In an Audit Test of Recorded Interest Expense and Accrued