Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Question
Chapter 2, Problem 11SE
To determine
Identify whether they violated the accounting concept for the given business transaction.
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Students have asked these similar questions
The following misstatements are included in the accounting records of Westgate Manufacturing Company.
Each month, a fraudulent receiving report is submitted to accounting by an employee in the receiving department. A few days later, he sends Westgate an invoice for the quantity of goods ordered from a small company he owns and operates in the evening. A check is prepared, and the amount is paid when the receiving report and the vendor’s invoice are matched by the accounts payable clerk.
Telephone expense (account 2112) was unintentionally charged to repairs and maintenance (account 2121).
Required:
For each misstatement, identify the transaction-related audit objective that was not met.
For each misstatement, state a control that should have prevented it from occurring on a continuing basis.
For each misstatement, state a substantive audit procedure that could uncover it.
Academic Dishonesty Investigations Ltd. operates a
plagiarism detection service for universities and
colleges.
Required:
1. Prepare journal entries for each transaction below. (If
no entry is required for a transaction/event, select "No
journal entry required" in the first account field.)
a. On March 31, ten customers were billed for detection
services totalling $40,000.
b. On October 31, a customer balance of $2,400 from a
prior year was determined to be uncollectible and was
written off.
c. On December 15, a customer paid an old balance of
$1,650, which had been written off in a prior year.
d. On December 31, $1,050 of bad debts were estimated
and recorded for the year.
2. Complete the following table, indicating the amount.
Ignore income taxes. (Enter any decreases with a minus
sign.)
Net Receivables
a.bcd
Net Sales
Income from
Operations
You are auditing the financial statements of a New York City company that buys a product from a manufacturer in Los Angeles. The buyer closes its books on June 30.Assume the following details:Terms of trade FOB shipping pointJune 10, buyer sends purchase order to sellerJune 15, seller ships goodsJuly 5, buyer receives goodsJuly 10, buyer receives seller’s invoicea. Could this transaction have resulted in an unrecorded liability in the buyer’s financial statements?b. If yes, what documents provide audit trail evidence of the liability?c. On what date did the buyer realize the liability?d. On what date did the buyer recognize the liability?New assumption:Terms of trade free on board destinatione. Could this transaction have resulted in an unrecorded liability in the buyer’s financial statements?f. If yes, what documents provide audit trail evidence of the liability?g. On what date did the buyer realize the liability?h. On what date did the buyer recognize the liability?
Chapter 2 Solutions
Principles of Accounting
Ch. 2 - A company incurs a cost for a part that is needed...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - How are assets and expenses related, and why are...Ch. 2 - Prob. 6DQCh. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Tell whether each of the following accounts is an...Ch. 2 - Prob. 2SE
Ch. 2 - Prob. 3SECh. 2 - Prob. 4SECh. 2 - Prob. 5SECh. 2 - Prob. 6SECh. 2 - Prob. 7SECh. 2 - Prepare a general journal form like the one in...Ch. 2 - Prepare three ledger account forms like the one in...Ch. 2 - Prob. 10SECh. 2 - Prob. 11SECh. 2 - Prob. 12SECh. 2 - Which of the following events would be recognized...Ch. 2 - You are given the following list of accounts with...Ch. 2 - The following ledger accounts are for Afocentric...Ch. 2 - Prob. 4EACh. 2 - The accounts that follow are applicable to Harolds...Ch. 2 - Prob. 6EACh. 2 - Prob. 7EACh. 2 - Prob. 8EACh. 2 - After recording the transactions in E6A, prepare a...Ch. 2 - The list that follows presents Shah Companys...Ch. 2 - Which of the following errors would cause a trial...Ch. 2 - Prob. 12EACh. 2 - Record the transactions in E6A in the general...Ch. 2 - Prob. 14EACh. 2 - Prob. 15EACh. 2 - Prob. 16EACh. 2 - Highland Design Company creates radio and...Ch. 2 - The following accounts are applicable to Georges...Ch. 2 - Jennifer Lopez opened a school for administrative...Ch. 2 - Sid Patel bid for and won a concession to rent...Ch. 2 - Nordtown Company is a marketing firm. The companys...Ch. 2 - Prob. 6APCh. 2 - The following accounts are applicable to Raymonds...Ch. 2 - Prob. 8APCh. 2 - David Roberts began an upholstery cleaning...Ch. 2 - Prob. 10APCh. 2 - Prob. 1CCh. 2 - Prob. 2CCh. 2 - Prob. 3CCh. 2 - Prob. 4CCh. 2 - Prob. 5CCh. 2 - Prob. 6CCh. 2 - Prob. 7C
Knowledge Booster
Similar questions
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