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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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
The auditors of Steffey Ltd., decided to study the cash receipts and disbursements for the month of July of the current year under audit. They obtained the bank reconciliations and the cash journals prepared by the company accountants, which revealed the following: June 30: Bank balance, $355,001; deposits in transit, $86,899; outstanding checks, $42,690; general ledger cash balance, $399,210. July 1: Cash receipts journal, $650,187; cash disbursements journal, $565,397. July 31: Bank balance, $506,100; deposits in transit, $51,240; outstanding checks, $73,340; general ledger cash balance, $484,000. Bank statement record of deposits: $835,846; of payments: $684,747. Required: Prepare a four-column proof of cash covering the month of July of the current year. (Negative amounts or amounts to be deducted should be indicated by a minus sign.)
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?
The following information was obtained in connection with the audit of XXX Corporation’s cash account as of December 31, 2021: Outstanding checks, November 30, 2021 – P16,250; Outstanding checks, December 31, 2021 – P12,500; Deposit in transit, November 30, 2021 – P12,500; Cash balance per books, December 31, 2021 – P 37,500; Actual company collections from its customers during December – P152,500; Company checks paid by bank in December – P130,000; Bank service charges recorded on company books in December – P2,500; Bank service charges per December bank statement – P3,250; Deposits credited by bank during December – P145,000; November bank service charges recorded on company books in December – P1,500. The cash receipts book of December is underfooted by P2,500. The bank erroneously charged the company’s account for P3,750 check of another depositor. This bank error was corrected in January 2022. REQUIRED: Prepare a proof of cash using book to bank method.
Common Law Responsibility for Errors and Fraud. Huffman & Whitman (H&W), alarge regional accounting firm, was engaged by Ritter Tire Wholesale Company to auditits financial statements for the year ended January 31. H&W had a busy audit engagement schedule from December 31 through April 1 and decided to audit Ritter’s purchasevouchers and related cash disbursements on a sample basis. The firm instructed staffmembers to select a random sample of 130 purchase transactions and gave directionsabout important deviations, including missing receiving reports. Boyd, the assistant incharge, completed the audit documentation, properly documenting the fact that 13 ofthe purchases in the sample had been recorded and paid without including the receivingreport (required by stated internal control procedures) in the file of supporting documents. Whitman, the partner in direct charge of the audit, showed the findings to Lock,Ritter’s chief accountant. Lock appeared surprised but promised…
The cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $32,527. During October, the total cash deposited was $139,121, and checks written totaled $135,890. The bank statement indicated a balance of $43,660 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a. Checks outstanding totaled $6,625. b. A deposit of $1,888 representing receipts of October 31, had been made too late to appear on the bank statement. c. The bank had collected for Coastal Bike Co. $5,250 on a note left for collection. The face of the note was $5,000. d. A check for $260 returned with the statement had been incorrectly charged by the bank as $620. e. A check for $410 returned with the statement had been recorded by Coastal Bike Co. as $140. The check was for the payment of an obligation to Rack Pro Co. on account. f. Bank service charges for October amounted to $37.…
The following information was obtained in connection with the audit of XXX Corporation's cash account as of December 31, 2021: Outstanding checks, November 30, 2021 - P16,250; Outstanding checks, December 31, 2021 - P12,500; Deposit in transit, November 30, 2021 – P12,500; Cash balance per books, December 31, 2021 – P 37,500; Actual company collections from its customers during December – P152,500; Company checks paid by bank in December – P130,000; Bank service charges recorded on company books in December – P2,500; Bank service charges per December bank statement - November bank service charges recorded on company books in December - P1,500. The cash receipts book of December is underfooted by P2,500. The bank erroneously charged the company's account for P3,750 check of another depositor. This bank error was corrected in January 2022. P3,250; Deposits credited by bank during December - P145,000; REQUIRED: Prepare a proof of cash using book to bank method.
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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