Current Attempt in ProgressAn auditor is testing accounts receivable for a client that has 1,000 customers with customer balances that range from $150 to$185,000. The auditor subdivided the receivables into three groups: group 1 has all customers with receivable balances between$185,000 and $100,000, group 2 has all customers with receivable balances between $100,000 and $25,000, and group 3 has allcustomers with receivable balances less than $25,000. The auditor then randomly selects customers out of each group. This is knownas:O random selection.O haphazard selection.O block selection.O stratified sampling.

It is stratified sampling because it shows the auditor dividing the receivables into groups that are…

Answered: Current Attempt in Progress An auditor…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PROBLEM 2 You are revisiting the audit working paper presented to you by your audit staff in line with his audit procedures done in auditing T-ara Corporation’s accounts receivable. The following were lifted from the said working papers: Audit notes: T-ara Corporation’s accounts receivable subsidiary ledger had the following details: Customers Invoice Date Invoice Amount Balance Park Ji-yeon Inc. 12/06/22 127,000 10/29/22 84,000 211,000 Hyomin Company 12/30/22 42,000 09/27/22 30,000 08/20/22 53,520 125,520 Hahn Eunjung Inc. 12/30/22 40,000 12/08/22 80,000 11/25/22 63,600 183,600 Park So-yeon Company 11/17/22 138,840 10/09/22 132,000 08/20/22 74,400 345,240 Jeon Boram Corporation 12/10/22 250,000 250,000 Qri Incorporated 09/12/22 104,400 104,400 Total 1,219,760 The…
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Q. A staff internal auditor was assigned to audit one of the company’s wholesale distribution locations. The staff auditor returned to the office after a week and said that everything was fine. The senior auditor reviewed the staff auditor’s working papers and noted that there was a year-end adjustment in excess of US $100,000—a debit to sales and a credit to accounts receivable. “To adjust the general ledger accounts receivable account to the accounts receivable subsidiary ledger” is how the description read. The senior asked the staff auditor how an error that big could have happened. He told her the location manager said there had been some problems installing the accounting system at the new store. Initially, the senior auditor thought the adjustment was proper since the general ledger balance was now in agreement with the subsidiary ledger. However, a short time later she was reviewing the analytical procedures performed by the staff auditor and noted that the gross margin…
Laboratory Management deposited into its account at Pulaski Bank a check issued by Fairway Farms in the amount of $150,000. The date of deposit was February 5. Pulaski, the depositary bank, initiated the collection process immediately by forwarding the check to Worthen Bank on the sixth. Worthen sent the check on for collection to M Bank Dallas, and M Bank Dallas, still on February 6, delivered the check to M Bank Fort Worth. That same day, M Bank Fort Worth delivered the check to the Fort Worth Clearinghouse. Because TAB/West Side, the drawee/payor bank, was not a clearinghouse member, it had to rely on TAB/Fort Worth for further transmittal of the check. TASI, a processing center used by both TAB/Forth Worth and TAB/West Side, received the check on the sixth and processed it as a reject item because of insufficient funds. On the seventh, TAB/West Side determined to return the check unpaid. TASI gave M Bank Dallas telephone notice of the return on February 7 but physically misrouted…
Sarawat company provided the following data for the month of February: Use One MS Excel file for this assessmenttask. Use ONE TAB sheet for every Test number. In presenting your answers use VERTICALORIENTATION, where answers will be presented vertically or going down NOT horizontally. Balance per book, February 28 Collection on February 28 but undeposited NSF Check received from a customer returned by the bank on March 5 with the February bank statement Check outstanding on February 28 Balance per bank, February 28 Bank debit memo for safety deposit boxrental not recorded by depositor A creditor check for P30,000 was incorrectly recorded in the depositor's book as A customer check for P200,000 was recorded by the depositor as The depositor neglected to make an entry in its books fora check drawn in payment of an account payable Task Requirements: Your taskis to prepare the following: P3,130,000 550,000 50,000 650,000 3,500,000 5,000 300,000 20,000 125,000 1. Aformal Bank Reconciliation…
Carl Roen had a balance of $1,700 in his checking account at First National Bank on a day when the bank received the following five checks for processing against his account. Check Number Check Amount Number Amount 3150 $135 3165 $750 3162 400 3166 1,710 3169 380 Assuming a $130 fee assessed by the bank for each bounced check, how much fee revenue would the bank generate if it processed checks (1) from largest to smallest, (2) from smallest to largest, and (3) in order of check number? Fee revenue (1) Largest to smallest $ so (2) Smallest to largest $ 30 (3) In order of check number $ 60
16. In an audit of Mindanao Company on December 31, 20XX, the following data are gathered: Balance per book, P1,000,000 Bank charges, P3,000 Outstanding checks, P235,000 Deposit in transit, P300,000 Customer note collected by bank, P375,000 Interest on customer note, P15,000 Customer check returned, NSF, P62,000 Depositor's note charged to account, P250,000 What is the adjusted cash in bank on December 31, 20XX?
Current Attempt in Progress Identify whether each of the following items would be (a) added to the book balance, or (b) deducted from the book balance in a bank reconciliation. 1. 2 3. 4. 5. EFT transfer to a supplier. Bank service charge. Check printing charge. Error recording check # 214 which was written for $260 but recorded for $620. Collection of note and interest by the bank on the company's behalf.
The financial records of the Movitz Company show that R. Dennis owes $4,100 on an account receivable. An independent audit is being carried out, and the auditors send a positive confirmation to R. Dennis. What is the most likely reason as to why a positive confirmation rather than a negative confirmation was used here?a. Control risk was particularly low for accounts receivable.b. Inherent risk was particularly high for accounts receivable.c. Dennis’s account was not yet due.d. Dennis’s account was not with a related party.
In your audit of the Gamer Inc., the client provided you the details of the Trade Accounts Receivable general ledger as follows: DEBITS Beginning Balance Credit Sales Shareholders' subscrptions Deposit on contract Claims against common carrier for damages IOUS from employees Cash advance to affiliates Advances to a supplier CREDITS 700,000 7,000,000 Write-off 300,000 Merchandise returns 220,000 Allowances to customer for shipping damages 200,000 Collections on carrier claims 20,000 Collections on subscriptions 200,000 60,000 Collections from Customers Use the above information in answering questions 1-5: Q1. The correct amount of trade accounts receivable 6,300,000 45,000 50,000 35,000 50,000 60,000

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