{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T03:50:37-04:00", "answer_date": "2024-06-28 03:50:37", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4235596", "url": "\/study-help\/questions\/question-1-answer-the-following-questions-1-when-performing-a-4235596", "question_creation_date_js": "2024-06-28T03:50:37-04:00", "question_creation_date": "Jun 28, 2024 03:50 AM", "meta_title": "[Solved] Question 1 Answer the following questions | SolutionInn", "meta_description": "Answer of - Question 1 Answer the following questions: (1) When performing a bank reconciliation, is the adjustment required to th | SolutionInn", "meta_keywords": "question,1,answer,questions,performing,bank,reconciliation,adjustment,required,statement,increase,decrease", "question_title_h1": "Question 1 Answer the following questions: (1) When performing a bank reconciliation, is the adjustment required to the bank statement an increase or a decrease", "question_title": "Question 1 Answer the following questions: (1) When performing a bank reconciliation,", "question_title_for_js_snippet": "Question 1 Answer the following questions (1) When performing a bank reconciliation, is the adjustment required to the bank statement an increase or a decrease where there is an outstanding cheque to account for (2) Z Company has two bank accounts, A and B A transfer is made from A to B When performing extended cash procedures, would an auditor find Z's overall cash position overstated or understated when a transfer is recorded on or before balance date in account A but after balance date in account B (3) Would an auditor perform a review of subsequent payments because he she was concerned that a liability was over stated or under stated Question 2 (i) Complete the table below, which relates to An Ageing of Debtors (Aged Trial Balance of Accounts Receivable) Aged Category 0 30 days, Balance ($) 2,000, Estimated Allowance 2 , Estimated Allowance ($) A Aged Category 31 60 days, Balance ($) 400, Estimated Allowance B , Estimated Allowance ($) 20 Aged Category 61 90 days, Balance ($) 200, Estimated Allowance 10 , Estimated Allowance ($) C Aged Category 91 120 days, Balance ($) 400, Estimated Allowance D , Estimated Allowance ($) 100 Aged Category 120 days, Balance ($) E, Estimated Allowance 50 , Estimated Allowance ($) 100 Total of Balance($) F, Total of Estimated Allowance($) G Find A to G (ii) What does the auditor do with the critical figure determined in the above table Question 3 Specify a substantive test for each of the following (1) Occurrence of purchases transactions (2) Completeness of sales transactions (3) The existence of the accounts receivable balance Question 4 For each of the following substantive tests, state one assertion that is tested (1) Vouch an entry in the Purchases Journal to the corresponding Receiving Note and Purchase Order (2) Perform a review of subsequent receipts (3) Compare the carrying amount of a line of inventory with its market price (4) Compare the ending balance of Accounts Payable with those of recent years (5) Perform an Ageing of Debtors Question 5 Classify the following as either type 1 or type 2 events for a firm with a December 31st balance date (i) A fire on January 18th caused a material loss of inventory that was not covered by insurance (ii) One month before balance date, the firm entered into a contract to purchase a new item of plant and equipment for $1m plus the cost of installing the item Installation was completed on January 20th (iii) On January 5th a currency in which some of the firm's sales contracts are denominated was depreciated Question 6 Answer the three questions below For questions (i) and (ii) key dates are as follows Balance date is June 30th The Audit Report was signed on September 30th The Financial Statements were issued to shareholders on November 4th (i) State three audit procedures required under ASA 560 if the auditor discovers that a material event took place on July 23rd (ii) Is the auditor required to undertake any audit procedures if he she was informed by management on October 9th that management intended to amend the financial report because of the bankruptcy of a major debtor on October 4th (iii) True or False If an auditor provides a new audit report in relation to a subsequent event, it cannot be dated earlier than the date on which the directors approved the emended financial report ", "question_description": "

Question 1<\/p>

Answer the following questions:<\/p>

(1) When performing a bank reconciliation, is the adjustment required to the bank statement an increase or a decrease where there is an outstanding cheque to account for?<\/p>

(2) Z Company has two bank accounts, A and B. A transfer is made from A to B. When performing extended cash procedures, would an auditor find Z's overall cash position overstated or understated when a transfer is recorded on or before balance date in account A but after balance date in account B?<\/p>

(3) Would an auditor perform a review of subsequent payments because he\/ she was concerned that a liability was over-stated or under-stated?<\/p>

<\/p>

Question 2 <\/p>

(i) Complete the table below, which relates to An Ageing of Debtors (Aged Trial Balance of Accounts Receivable).<\/p>

Aged Category: 0-30 days, Balance ($): 2,000, Estimated Allowance %: 2 , Estimated Allowance ($): A<\/p>

Aged Category: 31-60 days, Balance ($): 400, Estimated Allowance %: B , Estimated Allowance ($): 20<\/p>

Aged Category: 61-90 days, Balance ($): 200, Estimated Allowance %: 10 , Estimated Allowance ($): C<\/p>

Aged Category: 91-120 days, Balance ($): 400, Estimated Allowance %: D , Estimated Allowance ($): 100<\/p>

Aged Category: >120 days, Balance ($): E, Estimated Allowance %: 50 , Estimated Allowance ($): 100<\/p>

Total of Balance($): F, Total of Estimated Allowance($): G <\/p>

<\/p>

Find A to G <\/p>

<\/p>

(ii) What does the auditor do with the critical figure determined in the above table?<\/p>

<\/p>

Question 3<\/p>

Specify a substantive test for each of the following.<\/p>

(1) Occurrence of purchases transactions<\/p>

(2) Completeness of sales transactions<\/p>

(3) The existence of the accounts receivable balance<\/p>

<\/p>

Question 4<\/p>

For each of the following substantive tests, state one assertion that is tested:<\/p>

(1) Vouch an entry in the Purchases Journal to the corresponding Receiving Note and Purchase Order.<\/p>

(2) Perform a review of subsequent receipts.<\/p>

(3) Compare the carrying amount of a line of inventory with its market price.<\/p>

(4) Compare the ending balance of Accounts Payable with those of recent years.<\/p>

(5) Perform an Ageing of Debtors.<\/p>

<\/p>

Question 5<\/p>

Classify the following as either type 1 or type 2 events for a firm with a December 31st balance date.<\/p>

(i) A fire on January 18th caused a material loss of inventory that was not covered by insurance<\/p>

(ii) One month before balance date, the firm entered into a contract to purchase a new item of plant and equipment for $1m plus the cost of installing the item. Installation was completed on January 20th.<\/p>

(iii) On January 5th a currency in which some of the firm's sales contracts are denominated was depreciated.<\/p>

<\/p>

Question 6<\/p>

Answer the three questions below. For questions (i) and (ii) key dates are as follows: Balance date is June 30th. The Audit Report was signed on September 30th. The Financial Statements were issued to shareholders on November 4th.<\/p>

(i) State three audit procedures required under ASA 560 if the auditor discovers that a material event took place on July 23rd.<\/p>

(ii) Is the auditor required to undertake any audit procedures if he\/ she was informed by management on October 9th that management intended to amend the financial report because of the bankruptcy of a major debtor on October 4th?<\/p>

(iii) True or False. If an auditor provides a new audit report in relation to a subsequent event, it cannot be dated earlier than the date on which the directors approved the emended financial report.<\/p>", "transcribed_text": "", "related_book": { "title": "Global Strategy", "isbn": "0357512367, 978-0357512364", "edition": "5th Edition", "authors": "Mike W. Peng", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/649592eaa157d_32303.jpg", "uri": "\/textbooks\/global-strategy-5th-edition-9780357512364", "see_more_uri": "" }, "free_related_book": { "isbn": "1982938137", "uri": "\/textbooks\/the-debt-free-scream-how-we-paid-off-175-000-of-student-loans-in-30-months-1st-edition-978-1982938130-259213", "name": "The Debt Free Scream How We Paid Off $175 000 Of Student Loans In 30 Months", "edition": "1st Edition" }, "question_posted": "2024-06-28 03:50:37", "see_more_questions_link": "\/study-help\/questions\/business-banking-2021-September-12", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/how-do-grassroots-groups-use-technologies-to-disseminate-their-messages", "description": "How do grassroots groups use technologies to disseminate their messages? 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