Question 2.2. (TCO 9) Below are five audit procedures, all of which are tests of transactions associated with the audit of the sales and collection cycle. Classify each of the audit procedures below by matching the audit procedure with the management assertion being tested. (Points : 25)

Potential Matches:

1 : Existence or occurrence

2 : Completeness

3 : Presentation and disclosure

4 : Valuation or allocation

5 : Rights and obligations

Answer

: Inquire as to whether there are any receivables from related parties.

: Foot the purchases journal and compare the totals with the related general ledger accounts.

: Account for a sequence of prenumbered bills of lading and sales invoices.

: Inquire as to whether any account receivables have been factored or sold during the period.

: Vouch recorded sales from the sales journal to the file of bills of lading