Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 13, Problem 7RQ
Explain how the calculation and comparison to previous years of the gross margin percentage and the ratio of
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Distinguish between accuracy tests of gross accounts receivableand tests of the realizable value of receivables.
Which of the following provides the highest-quality evidence regarding the Valuation of recorded accounts payable?
Question 5 options:
Inspecting invoices for all cash disbursements during the year.
Performing analytical procedures.
Confirming balances with creditors and suppliers.
Recalculating the balance of accounts payable.
An auditor is required to confirm accounts receivable if the accounts receivable balances area. Older than the prior year.b. Material to the financial statements.c. Smaller than expected.d. Subject to valuation estimates.
Chapter 13 Solutions
Auditing And Assurance Services
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Explain how the calculation and comparison to...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - For each of the eight types of evidence discussed...
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Prob. 16RQCh. 13 - Prob. 17RQCh. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - Prob. 20RQCh. 13 - Prob. 21.1MCQCh. 13 - Prob. 21.2MCQCh. 13 - A conceptually logical approach to the auditors...Ch. 13 - Prob. 22.1MCQCh. 13 - Prob. 22.2MCQCh. 13 - Prob. 22.3MCQCh. 13 - Prob. 23.1MCQCh. 13 - b. Substantive analytical procedures are most...Ch. 13 - Prob. 23.3MCQCh. 13 - Prob. 24DQPCh. 13 - Prob. 25DQPCh. 13 - Prob. 26DQPCh. 13 - Prob. 27DQPCh. 13 - Prob. 28DQPCh. 13 - Prob. 29DQPCh. 13 - Prob. 30DQPCh. 13 - Prob. 31DQPCh. 13 - Prob. 32DQPCh. 13 - Prob. 33DQPCh. 13 - Prob. 34DQPCh. 13 - Prob. 35DQP
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- How to determine the adjusted balance of Accounts Receivable by usind the analysis of receivables method?arrow_forwardWhat is the process of confirming accounts receivable balances. Why is it important for auditors to understand revenue recognition rules?arrow_forwardDescribe the Subsequent Valuation of Accounts Receivable.arrow_forward
- How do you calculate Accounts Receivable (AR) Turnover and the Number of Days' Sales in Receivables? How is the amount of change method Calculated in horizontal financial statement Analysis?arrow_forwardHow to calculate the account receivable turnover ratio in a balance Sheet and income statement (explain it with the items on the income statement and balance Sheet eg.inventory, current receivable, current liability..and so on.arrow_forwardWhat is the accounts receivable turnover, and what typeof information does it provide?arrow_forward
- 2. In determining the validity of accounts receivable, which of the following would the auditor consider most reliable? a. Direct telephone communication between the auditor and debtor b. Confirmation replies received directly from customers c. Credits to accounts receivable from the cash receipts book after the close of business at year end d. Documentary evidence that supports the accounts receivable balancearrow_forwardHow do you calculate the estimate using the percentage of sales and aging of accounts methodsarrow_forwardExplain the relationship between the matching principle andthe need to estimate uncollectible accounts receivable.arrow_forward
- What does the days’ sales in receivables indicate, and how is it calculated?arrow_forwardWhich of the following will most likely provide the most assurance concerning theaccuracy balance-related objective for accounts receivable?(1) Vouch amounts in the subsidiary ledger to details on shipping documents.(2) Compare receivable turnover ratios with industry statistics for reasonableness.(3) Inquire about receivables pledged under loan agreements.(4) Assess the allowance for uncollectible accounts for reasonablenessarrow_forwardDiscuss, using practical example the effect of prepayment figures on the preparation of a financial statement? Suggest Four reasons why there might be difference between the balance on the receivable ledger control account and the total list of the list of accounts receivable ledger balances.? Discuss, using practical example how revenue expenditure should not be capitalized ?arrow_forward
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