Consider the following statements and explain why they may be true or false:

(a) The omission of a short-term liability from the balance sheet will result in the acid test ratio showing that the company is less liquid than it really is.

(b) Trade payables may be regarded as complete once auditors have carried out their search for unrecorded liabilities.

(c) Accurate cut-off means that trade payables are genuine.

(d) In valuing inventories it is permissible to include an element of administrative expense.

(e) In planning work on construction contracts the auditor should identify the points where management is exercising judgement.