Select the best answer choice for each of the following, and justify your selection in a brief statement.

a. The audit procedure of confirmation is least appropriate with respect to:

(1) The trustee of an issue of bonds payable.

(2) Holders of common stock.

(3) Holders of notes receivable.

(4) Holders of notes payable.

b. An auditor is most likely to trace treasury stock purchase transactions to the (1) Numbered stock certificates on hand.
(2) Articles of incorporation.
(3) Year's interest expense.
(4) Minutes of the audit committee.

c. In the audit of a manufacturing company of medium size, which of the following areas would you expect to require the least amount of audit time?
(1) Owners' equity.
(2) Revenue.
(3) Assets.
(4) Liabilities.

d. The auditors can best verify a client's bond sinking fund transactions and year-end balance by:
(1) Recomputation of interest expense, interest payable, and amortization of bond discount or premium.
(2) Confirmation with individual holders of retired bonds.
(3) Confirmation with the bond trustee.
(4) Examination and count of the bonds retired during the year.

e. The auditors' program for the examination of long-term debt should include steps that require the (1) Verification of the existence of the bondholders.
(2) Examination of copies of debt agreements.
(3) Inspection of the accounts payable subsidiary ledger.
(4) Investigation of credits to the bond interest income account.

f. All corporate capital stock transactions should ultimately be traced to the (1) Minutes of the board of directors.
(2) Cash receipts journal.
(3) Cash disbursements journal.
(4) Numbered stock certificates.