Question

Which accounts should be confirmed with outside sources? Briefly describe from whom they should be confirmed and the information that should be confirmed.

a) Notes Receivable - Confirmations should be obtained from borrowers, validating the accuracy of outstanding balances, terms, and the existence of any collateral.
b) Capital Stock - Confirmations should be obtained from the issuing authority, validating the accuracy of shares outstanding, par value, and ownership details.
c) Property, Plant, and Equipment - Confirmations should be obtained from appraisers to verify the fair market value of tangible assets.
d) Accrued Liabilities - Confirmations should be obtained from creditors to verify the accuracy of outstanding obligations and terms of payment.

Answer 1

Certain accounts, such as Notes Receivable, Capital Stock, Property, Plant, and Equipment, and Accrued Liabilities should be confirmed with outside sources to ensure accuracy.

Step-by-step explanation:

For financial reporting purposes, certain accounts should be confirmed with outside sources to ensure their accuracy. Here are the accounts and the information that should be confirmed:

1. Notes Receivable: Confirmations should be obtained from borrowers to validate the accuracy of outstanding balances, terms, and the existence of any collateral.
2. Capital Stock: Confirmations should be obtained from the issuing authority to validate the accuracy of shares outstanding, par value, and ownership details.
3. Property, Plant, and Equipment: Confirmations should be obtained from appraisers to verify the fair market value of tangible assets.
4. Accrued Liabilities: Confirmations should be obtained from creditors to verify the accuracy of outstanding obligations and terms of payment.