e. Add the sales journal for the month of July and trace amounts to the general ledger f. Compare the quantities on hand and unit prices on this year’s inventory count sheets with those in the preceding year as a test for large differences. g. Test the extension of unit prices times quantity on the inventory list for a sample of items, test foot the list, and compare the total to the general ledger. h. Trace selected quantities from the inventory list to the physical inventory to make sure that it exists, and the quantities are the same. i. Select a sample of inventory items in the factory warehouse and trace each item to the inventory count sheets to determine if it has been included and if the quantity and description are correct. j. Question operating personnel about the possibility of obsolete or slow-moving inventory.
1. For each of the following
a. Ask the accounts payable clerk about procedures for verifying prices, quantities, and extensions on vendors’ invoices –
b. Vouch entries in sales journal to sales invoices and related shipping documents. –
c. Examine the footnotes about the company’s policies for recording revenue transactions to determine whether the disclosures are reasonable
d. Examine expense voucher packages and related vendors’ invoices for approval of expense account classification.
e. Add the sales journal for the month of July and trace amounts to the general ledger
f. Compare the quantities on hand and unit prices on this year’s inventory count sheets with those in the preceding year as a test for large differences.
g. Test the extension of unit prices times quantity on the inventory list for a sample of items, test foot the list, and compare the total to the general ledger.
h. Trace selected quantities from the inventory list to the physical inventory to make sure that it exists, and the quantities are the same.
i. Select a sample of inventory items in the factory warehouse and trace each item to the inventory count sheets to determine if it has been included and if the quantity and description are correct.
j. Question operating personnel about the possibility of obsolete or slow-moving inventory.
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