Question

1. Consider the following statements:      I. For income-statement accounts, evidence relating to events at the...

1. Consider the following statements:

     I. For income-statement accounts, evidence relating to events at the balance-sheet date is considered to be more timely.

    II. For balance-sheet accounts, evidence relating to items At the balance-sheet date is considered to be more timely.

      a. I is true; II is true.

      b. I is true; II is false.

      c. I is false; II is true.

      d. I is false; II is false.

2. Checking extensions of sales quantity and unit prices [multiplications] on sales invoices is what type of evidence?

     a. Inspection of documents

     b. Recalculation

     c. Analytical review

     d. Confirmation

     e. None of the above

3. The auditor reviews the detail to the accounts receivable Account which has a general ledger balance of $100,000.

       Detail Support

            Customer        Balance

               A            $50,000

               B             40,000

               C             30,000

               D            (20,000)

                            --------

              Total       $ 100,000

                            ========

      a. Type of evidence Analytical Review; Accounts receivable to be reported on balance Sheet $100,000.

      b. Type of evidence Analytical Review; Accounts receivable to be reported on balance Sheet $120,000.

      c. Type of evidence Scanning; Accounts receivable to be reported on balance Sheet $100,000.

d. Type of evidence Scanning; Accounts receivable to be reported on balance Sheet $120,000.

Business   Accounting   
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Homework Answers

Answer #1

Ans 1- as per IFRS , For income-statement accounts, evidence relating to events at the balance-sheet date is considered to be more timely.

hence Option (c) is correct

ANS-2 checking of claculation is an audit part and we consider it as a recalculation process

hence option (b) is correct

ANS-3 this type of auditing is evidence scanning and also Account receivable are shown $120000 and for Customer D balance of ($20000) is an advance received from customer, hence shown in advance from customer in liability side\

Hence option (d) is correct

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