I'd like to confirm my answers in yellow.

Any feedback or advice will be appreciated.

Each of the following exercises requires you to think about how data behave when a misstatement condition exists, and how ratios the are based on those data bahave. Do they increase, decrease, or remain unchanged. These are, of course, idealized situations, but, the To simplify consideration of the effects of the following conditions, assume that each is a no- growth situation (unless stated otherwise). That is, in the absence of imisstatment none of the accounts or transaction streams is increasing or decreasing. In a real situation you would need to consider whether that is a reasonable assumption and, if needed adjust for it. Management nas begun to fraudulently recognize a material amount or maintenance and repair expense as additions to plant and equipment. The company uses the same depreciation rate for all long-lived assets. APPARENT BEHAVIOR P Sales Revenue Maintenance & repair expe Plant & equipment Depreciation expense Total operating expense REV MRX PE DX TOX d You type: G H F d P Variable or Ratio appears to be high Variable or Ratio appears to be high Variable or Ratio appears to be reasonable RATIO MRX/RE DX/PE REV/PE MRX/TO The client's accounting department fails to record the payables for inventory purchases on a timely basis. A material amount is unrecorded for upto two weeks after end-of-period. Goods received into inventory are, however, recorded promptly upon receipt. Assume that the total amount of purchases is known from debits to inventory. APPARENT BEHAVIOR Vouchers Payable Vpe Costof Sales COS Purchases Cash disbu ements Depending on how close to y/e or how rapidly client pays Inventory PUR CD INVE You type: G H F d P Variable or Ratio appears to be high Variable or Ratio appears to be high Variable or Ratio appears to be reasonable RATIO COS/INV COS/VPe PUR/CD COS/CD Depending on how close to y/e or how rapidly client pays