A Company Issued Long-Term Notes Payable for Cash During the Year

Multiple Choice

A company issued long-term notes payable for cash during the year under audit. To ascertain that this transaction was properly recorded, the auditor's best course of action is to:

A) trace the cash received from the issuance to the accounting records.
B) confirm the results of the issuance with the underwriter or investment banker.
C) verify that the new cash received is credited to an account entitled "Bonds Payable."
D) request a statement from the bond trustee as to the amount of bonds issued and outstanding.