1. Which of the following is correct concerning confirmation of accounts payable?

• A/ Confirmation is not required procedure on account payable
• B/ Its a generally accepted auditing procedure that is required
• C/ Its often unnecessary because accounts payable balance at the balance sheet date may not be paid before the audit is completed
• D/ The basis for selection of accounts is the largest balance due
• 2. Which of the following events occurring on January 5, 2016 is most likely to result in a disclosure in the 2015 financial statement?
• A/ A plant owned by the company was damaged by a flood, resulting in an uninsured loss of inventory
• B/ The company issued $2 million in convertible bonds
• C/ Both A and B
• B/ Neither A nor B