Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 10, Problem 43OQ
To determine
Fill the given table indicating the situation related to the cash at the year-end. Indicate the situation by using the following:
1. Year-end total cash is properly stated.
2. Year-end total cash is understated.
3. Year-end total cash is overstated.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In your audit of Ginko Company, you have received a cash confirmation and a cutoff statement from the bank on Ginko’s one bank account. Prepare a list of substantive procedures for Ginko’s cash
when auditing a client's year end cash balance, an auditor uses standard bank confirmations and performs tests on the clients year end bank reconciliations. These substantive procedures test which of the following assertions?
a. understandability of presentation and classification
b. cutoff
c. completeness and valuation and allowance
d. rights and obligations, and occurence
Kiting would least likely be detected by:
a. Analyzing details of large cash deposits around year end.
b. Comparing customer remittance advices with recorded disbursements in the cash disbursements journal.
c. Preparing a four-column bank reconciliation for all major cash accounts.
d. Preparing a schedule of interbank transfers by using the client's records and bank statements around year end.
Chapter 10 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prepare an example of lapping of cash receipts,...Ch. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - Prob. 14RQCh. 10 - Prob. 15RQCh. 10 - Prob. 16RQCh. 10 - Explain two procedures by which auditors may...Ch. 10 - Prob. 18RQCh. 10 - Prob. 19RQCh. 10 - Prob. 20RQCh. 10 - Prob. 21RQCh. 10 - Prob. 22RQCh. 10 - Prob. 23RQCh. 10 - Prob. 24RQCh. 10 - Prob. 25RQCh. 10 - Prob. 26QRACh. 10 - Henry Mills is responsible for preparing checks,...Ch. 10 - During the first few months of the year, John...Ch. 10 - Prob. 29QRACh. 10 - Prob. 30QRACh. 10 - Prob. 31QRACh. 10 - Prob. 32QRACh. 10 - Prob. 33QRACh. 10 - Prob. 34QRACh. 10 - Prob. 35QRACh. 10 - Prob. 36QRACh. 10 - Prob. 37QRACh. 10 - Select the best answer for each of the following...Ch. 10 - Prob. 38BOQCh. 10 - Prob. 38COQCh. 10 - Prob. 38DOQCh. 10 - Prob. 38EOQCh. 10 - Prob. 38FOQCh. 10 - Reconciliation of the bank account should not be...Ch. 10 - The auditors suspect that a clients cashier is...Ch. 10 - Prob. 38IOQCh. 10 - Prob. 38JOQCh. 10 - Prob. 38KOQCh. 10 - Prob. 38LOQCh. 10 - Which of the following represents a correct...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Which of the following correctly identifies a risk...Ch. 10 - Prob. 39DOQCh. 10 - Prob. 39EOQCh. 10 - Prob. 39FOQCh. 10 - Prob. 40OQCh. 10 - Prob. 41OQCh. 10 - Prob. 42OQCh. 10 - Prob. 43OQCh. 10 - Prob. 44OQCh. 10 - Prob. 45OQCh. 10 - Prob. 46PCh. 10 - Prob. 47PCh. 10 - Prob. 48PCh. 10 - Prob. 49PCh. 10 - Prob. 50ITCCh. 10 - Prob. 51ITCCh. 10 - Prob. 52RDCCh. 10 - Prob. 53EC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- QUESTIONS:Based on the above and result of your audit, determine the following: Cash receipts per bank in Mayarrow_forwardAssume that Oman Formaldehyde Chemical Company LLC sold the chemical of OMR 540 to the customer and received the check to the same amount. The cheque deposited in the bank immediately but the cheque received from the customer was misreported in the cash receipts journal as OMR 450. Therefore while preparing the Bank Reconciliation statement, what adjustment the accountant will do? Choose the correct answer from the following given options. a. Add OMR 540 to the cash book balance b. Deduct OMR 90 from the cash book balance c. Deduct OMR 540 from the cash book balance d. Add OMR 90 to the cash book balance Clear my choicearrow_forwardWhich procedure is an auditor most likely to use to detect a check outstanding at year-end that was not recorded as outstanding on the year-end bank reconciliation? Multiple Choice Prepare a bank transfer schedule using the client's cash receipts and cash disbursements journal. Receive a cutoff bank statement directly from the client's bank. Prepare a four column bank reconciliation using the year-end bank statement. Confirm the year-end balance using the standard form to confirm account balance information with financial institutions. MacBook Ainarrow_forward
- When auditors perform the bank reconciliation test, what would be the appropriate audit procedure for the cash receipts reported on the bank statement but not on the company cash account? A. Auditors investigate whether those cash payments are recorded in the cash payment journal. B. Auditors investigate whether those cash receipts are recorded in the cash receipt journal. C. Auditors trace those cash receipt transactions to bank statements issued in subsequent periods to see if they appear in bank statements after the balance date. D. Unpresented cheques need to be traced to subsequent bank statements. E. All of the options are correct.arrow_forwardThe auditor has gathered the following information to test the accuracy of the one prepared by the controller. In particular, the auditor is testing the accuracy of the outstanding cheques. Use the following information to prepare the bank reconciliation and calculate what the total of the outstanding cheques should be. 1. Cash balance - March 31 $39,500 2. Outstanding Deposits $13,810 3. NSF cheque from a customer $750 4. Bank Statement Balance - March 31 $127,100 5. The bank recorded a deposit as $10,000 when the deposit was actually $1,000 6. The bank credited the company's bank account with $3,900 of interest earned 7. The bank statement showed an EFT from a customer for $16,300 8. The bank charged a service charge of $45 9. The company posted cheque #1730 as $890 when the actual amount was properly debited by the bank for $980 a) Outstanding Cheques= $73,095 b) Outstanding Cheques= $76,995 c) Outstanding Cheques=$82,095 d) Outstanding Cheques= $56,795arrow_forwardYou are auditing Abra Inc.’s cash in bank for the year ended December 31, 2021. You assessed control risk over cash related cycles at the maximum level, thus you have decided to render an extensive substantive test procedure. As a result you ascertained the following information related to the company’s bank reconciliation items for two months: November 30 December 31 Cash per books P82,350 P221,425 Cash per bank statements 535,410 689,085 Undeposited collections 41,005 ? Outstanding checks 138,590 ? Bank service charges 3,600 3,000 Insufficient fund check 4,250 Company’s notes receivable collected by bank 359,075 404,500 The bank statement and the company’s cash records show the following totals: Checks and debit memos per bank statement, P1,091,865 Cash receipts per cash records, P1,182,260 Cash disbursements per cash records, P1,043,185 Deposits and credit memos per bank statement, P1,245,540 The…arrow_forward
- 1. Cash control systems are the methods and procedures used to ensure -- a. That current obligations are met b. That excess cash does not exists c. The safeguarding of cash d. That unused cash is invested 2. Bank reconciliation - a. Is the process of transferring money in or out of a bank account b. Requires that every transaction which will result in a cash payment be verified, approved and recorded before a bank check is prepared. c. Is an analysis that reflects the bank transactions made by the depositor d. Explains the difference between the bank balance and the balance shown in the depositor’s records 3. The journal entries for bank reconciliation - a. are taken from the balance per bank only b. may include a debit to office expense for bank service charges c. may include a credit to accounts receivable for an NSF check d. may include a debit to accounts…arrow_forwardIn a two-step bank reconciliation, identify the items that might be necessary to adjust the bank balance to the corrected cash balance. Identify the items that might be necessary to adjust the book balance to the corrected cash balance.arrow_forwardIn comparing the processed checks on the bank statement with the entries in the accounting records, it is found that check number 2889 for December's utilities was correctly written and drawn for $970 but was erroneously entered in the accounting records as $790. The journal entry to adjust the books for the bank reconciliation would include which of the following for this situation? a) $970 increase to Cash and a $790 decrease to Utility Expense. b) $180 increase to Cash and a $180 increase to Utility Expense. c) $180 decrease to Cash and a $180 increase to Utility Expense. d) $180 decrease to Cash and a $180 decrease to Utility Expense. e) $180 increase to Cash and a $120 decrease to Utility Expense.arrow_forward
- You are auditing the cash account of Vhina Inc. for the fiscal year ended July 31, 2020. The client has not prepared the July 31, bank reconciliation. The following information were made available: Audit notes: a. Bank reconciliation in June included the following information: Bank statement balance, June, P172,590; Deposits in transit, P18,000; Outstanding checks, P52,260, and; Balance per general ledger, June, P140,330. b. Checks clearing the bank in July, outstanding by the end of June was at P50,760. c. Checks clearing the bank in July and were recorded in the July cash disbursement journal was at P614,010. d. A check for P31,800 cleared the bank, but had not been recorded in the cash disbursement journal. It was for a payment of an accounts payable. e. A check for P11,880 was erroneously charged by the bank to Vhina Inc. f. Deposits included P18,000 from June and P733,680 from July. g. The bank charged Vhina Inc.'s account for a non-sufficient-fund check totaling to P9,330 The…arrow_forwardProof of Cash. You can use the computer-based Electronic Audit Documentation on thetextbook’s website to prepare the proof of cash required in this problem.The auditors of Steffey Ltd., decided to study the cash receipts and disbursements for themonth of July of the current year under audit. They obtained the bank reconciliations and thecash 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 (see Exhibit 6.13 for an example) covering the month ofJuly of the current year. Identify problems, if any.arrow_forwardWhich of the following controls would be most effective in detecting a failure torecord cash received from customers paying on their accounts?(1) A person in accounting reconciles the bank deposit to the cash receipts journal.(2) Transactions recorded in the cash receipts journal are posted on a real-timebasis to the accounts receivable master file.(3) Monthly statements are sent to customers and any discrepancies are resolved bysomeone independent of cash handling and accounting.(4) Deposits of cash received are made daily.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub