LSU ACCT 3222 Chp 12 & 13 - Final Exam
Quizzes Exam With Complete Solutions Graded
A+
QUESTIONS AND ANSWERS
What assertion is most important in auditing payables and liabilities?. ANSWER -
completeness
What assertion is tested when performing initial procedures for A/P balances?. ANSWER
-valuation
4 initial procedures for A/P. ANSWER -1. agree BB to PY
2. obtain A/P TB
3. scan for unusual transactions
4. agree sub ledger to GL
In auditing which accounts are substantive procedures optional?. ANSWER -payables/
liabilities
CASH (not meaningful bc of high fluctuation)
3 test of details of transactions of transactions for A/P. ANSWER -1. Vouch
2. Perform cutoff tests
3. Perform search for unrecorded liabilities
Which of the test of details of transactions for A/P is more powerful in testing
completeness?. ANSWER -Perform search for unrecorded liabilities
During cutoff testing for A/P, which transactions regarding shipment should the client
record if they are the purchaser?
What if they are the seller?. ANSWER -Purchaser: if FOB shipping point, anything
shipped before or on YE
if FOB destination, client should record anything received before or on YE
, Seller: if FOB shipping point, ownership transfers if shipped before/on YE
if FOB destination, client still owns anything still in transit on YE
3 procedures done when performing the search for unrecorded liabilites during the test of
details of transactions?. ANSWER -1. inspect subsequent cash disbursements
2. inspect recently recorded liabilities after YE
3. inspect outstanding/unmatched receiving reports/PO at YE or early Jan
What assertion does the test of details of balances test?. ANSWER -existence - not
commonly done (completeness is most important)
When should the test of details of balances to confirm A/P be performed?
(2). ANSWER -- if concerned abt overstatement of liabilities
- if client has weak IC over A/P and purchasing
During test of details of balances of A/P , what type of confirmations should be used?.
ANSWER -positive confirmations & leave amount blank
During test of details of balances of A/P, which clients should confirm?. ANSWER -send to
small or zero acct balances to check for understatement
3 ways of auditing other accrued liabilities (warranties, payroll, etc). ANSWER -- recalc
mngmt's estimates to check if reasonable
- inspect supporting documentation
- confirmation (if applicable)
5 initial procedures when auditing CASH:. ANSWER -1. agree BB to PY
2. obtain cash TB / schedules
3. scan for unusual items
4. check mathematical accuracy
5. agree sub ledger to GL
Quizzes Exam With Complete Solutions Graded
A+
QUESTIONS AND ANSWERS
What assertion is most important in auditing payables and liabilities?. ANSWER -
completeness
What assertion is tested when performing initial procedures for A/P balances?. ANSWER
-valuation
4 initial procedures for A/P. ANSWER -1. agree BB to PY
2. obtain A/P TB
3. scan for unusual transactions
4. agree sub ledger to GL
In auditing which accounts are substantive procedures optional?. ANSWER -payables/
liabilities
CASH (not meaningful bc of high fluctuation)
3 test of details of transactions of transactions for A/P. ANSWER -1. Vouch
2. Perform cutoff tests
3. Perform search for unrecorded liabilities
Which of the test of details of transactions for A/P is more powerful in testing
completeness?. ANSWER -Perform search for unrecorded liabilities
During cutoff testing for A/P, which transactions regarding shipment should the client
record if they are the purchaser?
What if they are the seller?. ANSWER -Purchaser: if FOB shipping point, anything
shipped before or on YE
if FOB destination, client should record anything received before or on YE
, Seller: if FOB shipping point, ownership transfers if shipped before/on YE
if FOB destination, client still owns anything still in transit on YE
3 procedures done when performing the search for unrecorded liabilites during the test of
details of transactions?. ANSWER -1. inspect subsequent cash disbursements
2. inspect recently recorded liabilities after YE
3. inspect outstanding/unmatched receiving reports/PO at YE or early Jan
What assertion does the test of details of balances test?. ANSWER -existence - not
commonly done (completeness is most important)
When should the test of details of balances to confirm A/P be performed?
(2). ANSWER -- if concerned abt overstatement of liabilities
- if client has weak IC over A/P and purchasing
During test of details of balances of A/P , what type of confirmations should be used?.
ANSWER -positive confirmations & leave amount blank
During test of details of balances of A/P, which clients should confirm?. ANSWER -send to
small or zero acct balances to check for understatement
3 ways of auditing other accrued liabilities (warranties, payroll, etc). ANSWER -- recalc
mngmt's estimates to check if reasonable
- inspect supporting documentation
- confirmation (if applicable)
5 initial procedures when auditing CASH:. ANSWER -1. agree BB to PY
2. obtain cash TB / schedules
3. scan for unusual items
4. check mathematical accuracy
5. agree sub ledger to GL
