Answer Statements For a continuing audit client, the audit of retained earnings often consists of determining that the net income was added to the beginning balance and that the were subtracted. 1. 2. If violation of a debt provision makes a debt payable on demand, the debt must be classified as a current asset unless a is obtained from the trustee or the financial institution. waiver of compliance 3. The formal document creating bonded indebtedness is called the In the audit of interest-bearing debt, the auditors' primary substantive procedures will include transactions occurring during the period to available support. Internal control over the payment of dividends is enhanced when the company utilizes the services of an independent 5. bylaws debt agreements dividend paying agent dividends intent and the ability premium registrar registrar and the transfer agent trust indenture vouching waiver of compliance