Accounting Information Systems
10th Edition
ISBN: 9781337619202
Author: Hall, James A.
Publisher: Cengage Learning,
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Chapter 5, Problem 9DQ
To determine
Identify the document providing evidence that liability exists and may be unrecorded in the case of conducting an end-of-year audit, assuming that the terms of trade between a buyer and a seller are free on board (FOB) destination.
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Where would an auditor find the proper authorization that indicates it is okay to pay a vendor?
if the auditor want to assure that Receivables have not been sold. What assertion he or she want to test :
Select one:
a. Existence
b. Completeness
c. Rights and obligations
d. Valuation and allocation
Which document typically triggers the process of recording a liability? a. purchase requisition b. purchase order c. receiving report d. supplier’s invoice
Chapter 5 Solutions
Accounting Information Systems
Ch. 5 - Prob. 1RQCh. 5 - What purpose does a purchasing department serve?Ch. 5 - Prob. 3RQCh. 5 - Prob. 4RQCh. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - Prob. 7RQCh. 5 - Prob. 8RQCh. 5 - Prob. 9RQCh. 5 - Some organizations do not use an AP subsidiary...
Ch. 5 - What is the purpose of the blind copy of a PO?Ch. 5 - Prob. 12RQCh. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - The level of day-to-day department activity in...Ch. 5 - Prob. 5DQCh. 5 - What is central to a successful EDI...Ch. 5 - Discuss the objective of eliminating the receiving...Ch. 5 - What purpose does multilevel security control play...Ch. 5 - Prob. 9DQCh. 5 - Prob. 10DQCh. 5 - Which of the following statements is correct? a....Ch. 5 - Which of the following represents incompatible...Ch. 5 - Prob. 3MCQCh. 5 - Prob. 4MCQCh. 5 - Prob. 5MCQCh. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - Which of the following tasks should the cash...Ch. 5 - Which ledger can be updated solely from the...Ch. 5 - Prob. 10MCQCh. 5 - Prob. 1PCh. 5 - INVENTORY ORDERING ALTERNATIVES The flowchart for...Ch. 5 - Prob. 3PCh. 5 - Prob. 4PCh. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Prob. 8PCh. 5 - Prob. 9PCh. 5 - Prob. 10PCh. 5 - Prob. 11PCh. 5 - UNRECORDED LIABILITIES You are auditing the...Ch. 5 - SMITHS MARKET (SMALL BUSINESS ACCOUNTING SYSTEM)...Ch. 5 - POSAVEK REMODELING AND BUILDING SUPPLY COMPANY...Ch. 5 - GREEN POND NURSERY (STANDALONE PC-BASED ACCOUNTING...Ch. 5 - Prob. 4ICCCh. 5 - Prob. 5ICCCh. 5 - Prob. 6ICCCh. 5 - Prob. 7ICCCh. 5 - Prob. 8ICC
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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
- An electronic seal indicating that an electronic seller observes certain practices is Select one: a. Audit b. Attestation services c. Non assurance services d. Other assurance servicesarrow_forwardWhich documents would an auditor most likely choose to examine closely to ascertain that all expenditures incurred during the accounting period have been recorded as a liability?a. invoices b. purchase orders c. purchase requisitions d. receiving reportsarrow_forwardThe auditor is MOST likely to learn of retirements of equipment through which of the following? a. Review of the purchase and allowance account. b. Review of the sales discount account. c. Analysis of the credits to the accumulated depreciation account. d. Review of insurance policy riders. e. Confirmation of recorded credits to the accounts payable account.arrow_forward
- List two types of restrictions long-term creditors often put oncompanies when granting them a loan. How can the auditor find out about these restrictions?arrow_forward21 - Which of the following forms of payment provides a high level of assurance to both the seller and the buyer?A) Advance paymentB) Consignment saleC) Payment by letter of creditD) Payment with acceptance creditE) Payment against documentsarrow_forward10. The inspection of a vendor's invoice by the auditors is: Select one:a. Direct evidence about occurrence of a transactionb. Part of the client's accounting systemc. Documentary evidence about occurrence of a transactiond. Physical evidence about occurrence of a transactarrow_forward
- The auditor reviewed the shipping documents to ensure that all products included in the sales revenue to XYZ have been shipped. This is an example of: * O Classification Completeness Rights and obligations O Occurrencearrow_forwardWhich of the following is most likely to result in the recognition of a liability? a. Customers become entitled to rebates for their past purchases. b. Intention to acquire inventories in a future period. c. Entering into a purchase contract for future delivery. d. Agreeing on an irrevocable future commitment that is not burdensome at present.arrow_forwardA client’s purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes auditors’ primary concern with respect to liabilities resulting from the purchasing system?a. Accounts payable are not materially understated.b. Authority to incur liabilities is restricted to one designated person.c. Acquisition of materials is not made from one vendor or one group of vendors.d. Commitments for all purchases are made only after established competitive bidding procedures are followed.arrow_forward
- An audit trail enables a person to trace a source document to its ultimate effect on the financial statements or work back from amounts in the financial statements to source documents. Describe in detail the audit trail for the following: a. Purchases of inventoryb. Sales of inventoryc. Employee payrollarrow_forwardWhich of the following audit procedures represent a substantive test of transaction that would validate managements assertion on occurrence of a purchase transaction a. Comparing the classification of the transaction based on the supplier's invoice with the company’s chart of accounts. b. Recalculation of the supplier's invoice to check its mathematical accuracy. c. Reviewing and scanning of the purchases journal for large or unusual amounts. d. Tracing from the file of receiving reports to the purchases journalarrow_forwardWhich of the following auditing procedures probably would provide the most reliable evidence concerning the entity’s assertion of rights and obligations related to inventories?a. Trace test counts noted during the entity’s physical count to the entity’s summarization of quantities.b. Inspect agreements to determine whether any inventory is pledged as collateral or subject to any liens. c. Select the last few shipping documents used before the physical count and determine whether the shipments were recorded as sales.d. Inspect the open purchase order file for significant commitments that should be considered for disclosure.arrow_forward
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