Which of the following procedures is most likely to be used to verify the completeness of accounts payable?A) Confirming accounts payable with suppliersB) Reviewing subsequent disbursementsC) Examining supporting documentation for cash disbursementsD) Comparing vendor statements with recorded payables
Question
Which of the following procedures is most likely to be used to verify the completeness of accounts payable?A) Confirming accounts payable with suppliersB) Reviewing subsequent disbursementsC) Examining supporting documentation for cash disbursementsD) Comparing vendor statements with recorded payables
Solution
The procedure most likely to be used to verify the completeness of accounts payable is A) Confirming accounts payable with suppliers.
Here's why:
A) Confirming accounts payable with suppliers: This procedure involves reaching out to suppliers to confirm the amounts that the company owes them. This is the most direct way to verify the completeness of accounts payable because it involves getting information directly from the source.
B) Reviewing subsequent disbursements: This procedure can help verify the accuracy of accounts payable, but it may not necessarily verify the completeness. There could be outstanding payables that have not yet been disbursed.
C) Examining supporting documentation for cash disbursements: This procedure can also help verify the accuracy of accounts payable, but it may not necessarily verify the completeness. There could be payables that have not yet been disbursed.
D) Comparing vendor statements with recorded payables: This procedure can help identify discrepancies between what the company has recorded and what the vendor claims, but it may not necessarily verify the completeness. There could be payables that the vendor has not yet billed or that the company has not yet recorded.
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