Accounting Multiple Choice Question – 14 May 2026

Which ONE of the following procedures would be the most appropriate for verifying the interest accrued on borrowings?

Select ONE answer:

1. Confirming the interest rate with the lender
2. Vouching to the interest paid
3. Testing internal controls over cash payments
4. Recalculating the interest accrued based on the outstanding amount, interest rate and period to which it relates

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Recalculating the interest accrued on the basis of outstanding amount, interest rate and period to which it relates would be the most appropriate for verification of the interest accrued on borrowings. Confirming the interest rate with the lender would not verify the total interest accrued balance (as the interest rate is only one component of the calculation) nor would vouching the interest payment (as interest paid is not the same as interest accrued). Testing the internal controls over cash payments would not lead to direct verification of the interest accrued.

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