Chapter $13(16-20)$ Make sure to answer each question.

$16.$ Which of the following procedures is an auditor least likely to perform when auditing prepaid insurance?

a$.$ Confirm policies with insurance carriers.

b$.$ Examine insurance policies.

c$.$ Value insured property.

d$.$ Agree balances to the general ledger.

$17.$ Which of the following procedures is most relevant to testing the completeness assertion for prepaid insurance?

a$.$ Testing whether insurance coverage exceeds the replacement value of insured tangible property

b$.$ Confirming insurance policies with carriers

c$.$ Reconciling premium payments with cash disbursement records

d$.$ Agreeing total expense and unexpired premiums with the general ledger

$18.$ In addressing control procedures for accrued property taxes, which of the following controls would not be relevant to the auditor?

a$.$ Controls over the recognition of accrued taxes

b$.$ Controls over recording expense for taxes owed

c$.$ Controls over the disbursement of cash for taxes

d$.$ Controls over fixed asset additions

$19.$ Which of the following are likely legitimate reasons why a potentially responsible party would have difficulty estimating environmental cleanup costs?

a$.$ Possible as yet unknown contamination

b$.$ Possible future legislation

c$.$ Possible insurance recoveries

d$.$ Possible preexisting contamination

$20.$ Under which of the following conditions would it be inappropriate for a potentially responsible party to capitalize toxic waste cleanup costs?

a$.$ The costs relate to a long$-$existing disposal site

b$.$ The costs extend the life of the property.

c$.$ The costs prevent future contamination.

d$.$ The costs further ready property currently held for sale.