Question

Question 7 The best test of balances for accounts payable is: recalculation. confirmation from the vendor....

Question 7 The best test of balances for accounts payable is:

recalculation.

confirmation from the vendor.

reconciliation of the accounts payable listing to the control account.

review of subsequent cash disbursements and underlying documents to determine when the liability was incurred.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The best test of balances for accounts payable is the confirmation from the vendor. As per the standard auditing this is also called as external confirmation whereby the balance is confirmed from the vendors and tallied with the the balances in the books of accounts of the company.

This is the best test of balance because it is not connected to the the internal process of the company but it is connected with the external people.All the other options are related to the internal process or internal books of accounts whereby any mistake in one of the accounts will be very hard to rectify because the same mistake will be repeated in the other ledger account .

Therefore the correct option is confirmation from the vendor.

If you find the answer helpful please upvote.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Audit procedure A. Vouch accounts payable credits to supporting vouchers, vendor invoices, receiving reports, and purchase...
Audit procedure A. Vouch accounts payable credits to supporting vouchers, vendor invoices, receiving reports, and purchase orders and other supporting information. B. Obtain an understanding of the business and industry and determine the significance of purchases and accounts payable to the entity. C. Inquire of management about existence of undisclosed commitments or contingent liabilities. D. Trace a sample of cash receipts transactions from cash receipts journal to the general ledger. E. Vouch debit memos to underlying shipping reports and vendor's...
Create a Flowchart for the following scenario: An invoice is received in accounts payable from the...
Create a Flowchart for the following scenario: An invoice is received in accounts payable from the vendor, where it is matched to the purchase order received from the purchasing department and the receiving report from the receiving department. If the documents match then the information from the invoice is entered into the accounts payable system to update the master files. A payment authorization is then generated with 2 copies. One copy is filed alphabetically with the invoice, purchase order, and...
T/F 6. In determining which vendor to order goods from, the purchasing department should always use...
T/F 6. In determining which vendor to order goods from, the purchasing department should always use its customary vendor. T/F 7. Confirmation of accounts payable is generally mandatory. T/F 8. The purchase cutoff test involves determining that purchase transaction occurring near the balance sheet data are recorded in the proper time period. T/F 9. In a review of financial statements under SSARS, the accountant must obtain an understanding of the clients internal control, but need not perform test of controls....
PLEASE LOOK THE QUESTION DON'T PUT OUT THE ANSWER ON INTERNET!!!!! SoftData, a vendor, sends an...
PLEASE LOOK THE QUESTION DON'T PUT OUT THE ANSWER ON INTERNET!!!!! SoftData, a vendor, sends an invoice to Accuflow for data warehousing support services. The invoice is sent directly to Megan Waters, the accounts payable clerk, who manually records the invoice in the accounts payable subsidiary ledger. Once the invoice is recorded it is forwarded to Stan Phillips, the cash disbursements clerk, for processing. Stan prepares a check to pay the invoice and sends the check and invoice to John...
Identify each of the follow as either a document, a test of details, a test of...
Identify each of the follow as either a document, a test of details, a test of controls, an actual control activity, a type of control, a risk, an assertion or none of the above. Someone could steal blank checks Understandability Bank reconciliation Re-performing a bank reconciliation Management reviewing the bank reconciliation and comparing it with the bank statement Obtaining an accounts receivable confirmation 2 people opening the mail Existence Detective controls Preparing a receiving report when items arrive Performing a...
For each of the following substantive procedures, first note whether it is a test of details...
For each of the following substantive procedures, first note whether it is a test of details of transactions or a test of details of account balances. Then decide for which assertion the test provides the best evidence. Trace large cash receipts and payments to the source documents and the general ledger. Examine copies of note and bond agreements. Recompute accrued interest payable. Review debt activity for a few days before and after year-end to determine whether transactions are included in...
THIS IS THE ENTIRE QUESTION. THERE IS NO MORE!! IF YOU ARE THE ONE WHO KEEPS...
THIS IS THE ENTIRE QUESTION. THERE IS NO MORE!! IF YOU ARE THE ONE WHO KEEPS COMMENTING THEN PLEASE DO NOT ANSWER AND LET SOMEONE ELSE DO IT. I know the beginning would probably start at "Inventory Control" and one of the "2 part requisitions" would go to "Purchasing" while the other would be "filed somewhere."   SYSTEM DOCUMENTATION— EXPENDITURE CYCLE (MANUAL PROCEDURES) The following describes the expenditure cycle manual procedures for a hypothetical company. The inventory control clerk examines the...
Below are audit procedures for the sales and collection, and acquisition and payments cycles. In each...
Below are audit procedures for the sales and collection, and acquisition and payments cycles. In each case, indicate the type of audit procedure (e.g. test of control, analytical procedure, substantive test of transactions, or test of details of balances), the transaction-related or balance-related audit objective and type of evidence (e.g. documentation, observation etc.). 1. Trace recorded sales transactions to shipping documents to determine whether a document exists. 2. Obtain a prelisting of cash receipts and trace amounts to the cash...
Accounts Payable Subsidiary Ledger The cash payments and purchases journal for Outdoor Artisan Landscaping follow. The...
Accounts Payable Subsidiary Ledger The cash payments and purchases journal for Outdoor Artisan Landscaping follow. The accounts payable control account has a June 1, 20Y1, balance of $5,590, consisting of an amount owed to Augusta Sod Co. CASH PAYMENTS JOURNAL Page 31 Date Ck. No. Account Debited Post Ref. Other Accounts Dr. Accounts Payable Dr. Cash Cr. 20Y1 June 4 203 Augusta Sod Co. √ 5,590 5,590 5 204 Utilities Expense 54 730 730 15 205 Home Centers Lumber Co....
Codger Corp. — Internal Controls Codger Corp. (CC or the “Company”) is a U.S. public company...
Codger Corp. — Internal Controls Codger Corp. (CC or the “Company”) is a U.S. public company that files quarterly andannual reports with the Securities and Exchange Commission (SEC). CC is a leading retail chain operating more than 100 department stores across the continental United States. CC department stores offer customers a variety of nationally advertised products, including clothing, shoes, jewelry, and other accessories. The Company’s supply chain ofproducts is managed through a single warehouse and distribution facility located in Kansas...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT