An effective way to identify liabilities that were unrecorded at year-end is
A)reviewing liabilities recorded after year-end
B)reviewing journal entries after year-end
C)reviewing account closings after year-end
D)reviewing the open purchase file for evidence of purchase commitments

Question

Quizplus · Accepted Answer

Reviewing the open purchase file for evidence of purchase commitments can provide information on liabilities that were not recorded by year-end. This information can include outstanding purchase orders or contracts for goods or services that were not yet received or invoiced by year-end. Reviewing liabilities recorded after year-end, reviewing journal entries after year-end, and reviewing account closings after year-end may provide information on liabilities that were recorded or adjusted after year-end, but may not identify liabilities that were unrecorded as of year-end.

An Effective Way to Identify Liabilities That Were Unrecorded at Year-End