1. “Of the balance of $142,000, $20,000 is incorrect because it represents goods that we didn’t receive until January 5, 2021.” Follow-up: Inspection of shipping records reveals that the item was shipped on December 31, 2019 fob destination.

2.   “Of the account’s $160,000 balance, we only owe $155,200 as $4,800 (3% of the total) is not due because the KeyBoard’s salesperson told us that she would give us a “special” discount beyond the normal.”   Follow-up: While inspection of the sales agreement indicated no such discount arrangement, discussions with Carter Addison (controller) and Joshua Caleb (president) indicated that the salesperson had inappropriately granted such a discount to the client. On January 10, 2021, they processed the discount and credited the account for $4800.

3. We will owe the balance of $95,000 when we sell the goods for KeyBoard. We are currently holding the goods on consignment. Follow-up: Client states that the goods were shipped on December 29, 2020, on consignment, and their system properly triggers a sales invoice when goods are shipped.

4.“The balance of $140,000 is incorrect because we paid that amount in full on December 24, 2020.” Follow-up: An analysis of the cash receipts journal revealed that the check had been received in the mail on January 2^nd and deposited. Also noted the check was listed on the deposit slip for January 2^nd.

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