Comprehensive Questions 11-21 (Assessing Control Risk) An auditor is required to obtain a sufficient understanding of each of the components of an entity’s system of internal control to plan the audit of the entity’s financial statements and to assess control risk for the assertions embodied in the account balance, transaction class, and disclosure components of the financial statements.
Required
a. Explain the reasons an auditor may assess control risk at the maximum level for one or more assertions embodied in an account balance.
b. What must an auditor do to support assessing control risk at less than the maximum level when the auditor has determined that controls have been placed in operation?
c. What should an auditor consider when seeking a further reduction in the planned assessed level of control risk?
d. What are an auditor’s documentation requirements concerning an entity’s system of internal control and the assessed level of control risk?
AICPA (adapted)
Click here for the solution: Comprehensive Questions 11-21 (Assessing Control Risk) An auditor is required to obtain a sufficient understanding of each of the components
Showing posts with label Comprehensive. Show all posts
Showing posts with label Comprehensive. Show all posts
Tuesday, November 10, 2015
Sunday, September 13, 2015
Accounting Comprehensive Project: Alli Co. is a merchandising business
Foundations of Accounting I
Accounting Project
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
Click here for the solution: Alli Co. is a merchandising business
Accounting Project
Alli Co. is a merchandising business. The account balances for Alli Co. as of November 30, 2012 (unless otherwise indicated), are as follows:
110 Cash $ 73,920
112 Accounts Receivable 37,875
AND SO ON
Check Figures for Accounting Project:
Cash Receipts Journal; Cash Column: 90,411
Unadjusted Trial Balance Total: 1,075,455
Net Income: 254,829
Post Closing Trial Balance: 355,756
Click here for the solution: Alli Co. is a merchandising business
Tuesday, September 8, 2015
ACC 225 Week 9 Final Project: Comprehensive Problem-Perpetual: Denney Enterprises
ACC 225 Week 9
Use the spreadsheet in Course Materials named Final Project to complete the problems. Use the tabs labeled P07D and Given P07D.
Inv. No. Check
Date Description Name or Date No. Terms Amount
Dec. 16 Merchandise sold (cost $4,600) Hanna Seppa 916 2/10, n/30 $7,700
17 Received credit memo on returned merch. Funk Company Dec. 15 1,040
17 Purchased office supplies KK's Supply Company Dec. 16 n/10 EOM 615
18 Received credit memo on returned merch. KK's Supply Company Dec. 17 40
20 Issued credit memo on returned merch. Bo Brown Dec. 15 500
21 Purchased store equipment KK's Supply Company Dec. 21 n/10 EOM 6,700
22 Received payment less discount Hanna Seppa Dec. 12
23 Paid invoice less discount Crossland Company Dec. 15 623
24 Sold merchandise on credit (cost $600) Shilo Jones 917 1,200
24 Paid inv. less discount and return Funk Company Dec. 15 624
25 Received payment less discount and return Bo Brown Dec. 15
26 Purchased merchandise and invoice Crossland Company Dec. 25 2/10, n/60 8,100
29 Sold office supplies for cash at cost 50
30 Issued check to owner for personal use Cadence Denney 625 2,500
31 Check issued for sales salaries Jamie Inman 626 2,020
31 Issued check for electric bill Access Electric Company 627 710
31 Cash sales for last half of month (cost $11,200) 29,600
Check figure: Trial balance totals $219,408
Click here for the solution: ACC 225 Week 9 Final Project: Comprehensive Problem-Perpetual: Denney Enterprises
Use the spreadsheet in Course Materials named Final Project to complete the problems. Use the tabs labeled P07D and Given P07D.
Inv. No. Check
Date Description Name or Date No. Terms Amount
Dec. 16 Merchandise sold (cost $4,600) Hanna Seppa 916 2/10, n/30 $7,700
17 Received credit memo on returned merch. Funk Company Dec. 15 1,040
17 Purchased office supplies KK's Supply Company Dec. 16 n/10 EOM 615
18 Received credit memo on returned merch. KK's Supply Company Dec. 17 40
20 Issued credit memo on returned merch. Bo Brown Dec. 15 500
21 Purchased store equipment KK's Supply Company Dec. 21 n/10 EOM 6,700
22 Received payment less discount Hanna Seppa Dec. 12
23 Paid invoice less discount Crossland Company Dec. 15 623
24 Sold merchandise on credit (cost $600) Shilo Jones 917 1,200
24 Paid inv. less discount and return Funk Company Dec. 15 624
25 Received payment less discount and return Bo Brown Dec. 15
26 Purchased merchandise and invoice Crossland Company Dec. 25 2/10, n/60 8,100
29 Sold office supplies for cash at cost 50
30 Issued check to owner for personal use Cadence Denney 625 2,500
31 Check issued for sales salaries Jamie Inman 626 2,020
31 Issued check for electric bill Access Electric Company 627 710
31 Cash sales for last half of month (cost $11,200) 29,600
Check figure: Trial balance totals $219,408
Click here for the solution: ACC 225 Week 9 Final Project: Comprehensive Problem-Perpetual: Denney Enterprises
Tuesday, June 23, 2015
(Accounting Principles-Comprehensive) Presented below are a number of business transactions that occurred during the current year for Fresh Horses, Inc
Exercise 2-7 (E2-7) Accounting Principles-Comprehensive. Presented below
are a number of business transactions that occurred during the current
year for Fresh Horses, Inc.
Instructions
In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles.
(a) The president of Fresh Horses, Inc. used his expense account to purchase a new Suburban solely for personal use. The following journal entry was made.
Miscellaneous Expense 29,000
Cash 29,000
(b) Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value.
Merchandise Inventory 70,000
Revenue 70,000
(c) The company is being sued for $500,000 by a customer who claims damages for personal injury apparently caused by a defective product. Company attorneys feel extremely confident that the company will have no liability for damages resulting from the situation. Nevertheless, the company decides to make the following entry.
Loss from Lawsuit 500,000
Liability for Lawsuit 500,000
(d) Because the general level of prices increased during the current year, Fresh Horses, Inc. determined that there was a $16,000 understatement of depreciation expense on its equipment and decided to record it in its accounts. The following entry was made.
Depreciation Expense 16,000
Accumulated Depreciation 16,000
(e) Fresh Horses, Inc. has been concerned about whether intangible assets could generate cash in case of liquidation. As a consequence, goodwill arising from a purchase transaction during the current year and recorded at $800,000 was written off as follows.
Retained Earnings 800,000
Goodwill 800,000
(f) Because of a “fire sale,” equipment obviously worth $200,000 was acquired at a cost of $155,000. The following entry was made.
Equipment 200,000
Cash 155,000
Revenue 45,000
Click here for the solution: (Accounting Principles-Comprehensive) Presented below are a number of business transactions that occurred during the current year for Fresh Horses, Inc
Instructions
In each of the situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles.
(a) The president of Fresh Horses, Inc. used his expense account to purchase a new Suburban solely for personal use. The following journal entry was made.
Miscellaneous Expense 29,000
Cash 29,000
(b) Merchandise inventory that cost $620,000 is reported on the balance sheet at $690,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value.
Merchandise Inventory 70,000
Revenue 70,000
(c) The company is being sued for $500,000 by a customer who claims damages for personal injury apparently caused by a defective product. Company attorneys feel extremely confident that the company will have no liability for damages resulting from the situation. Nevertheless, the company decides to make the following entry.
Loss from Lawsuit 500,000
Liability for Lawsuit 500,000
(d) Because the general level of prices increased during the current year, Fresh Horses, Inc. determined that there was a $16,000 understatement of depreciation expense on its equipment and decided to record it in its accounts. The following entry was made.
Depreciation Expense 16,000
Accumulated Depreciation 16,000
(e) Fresh Horses, Inc. has been concerned about whether intangible assets could generate cash in case of liquidation. As a consequence, goodwill arising from a purchase transaction during the current year and recorded at $800,000 was written off as follows.
Retained Earnings 800,000
Goodwill 800,000
(f) Because of a “fire sale,” equipment obviously worth $200,000 was acquired at a cost of $155,000. The following entry was made.
Equipment 200,000
Cash 155,000
Revenue 45,000
Click here for the solution: (Accounting Principles-Comprehensive) Presented below are a number of business transactions that occurred during the current year for Fresh Horses, Inc
Wednesday, June 17, 2015
(Comprehensive Accounting Cycle Problem) The following trial balance was prepared for Gifts, Etc., Inc., on December 31, 2010, after the closing entries were posted
Problem 5-26 Comprehensive Accounting Cycle Problem (Uses Percent of Revenue Allowance Method)
The following trial balance was prepared for Gifts, Etc., Inc., on December 31, 2010, after the closing entries were posted.
AND SO ON
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for 2011.
Check:
Net Income: $236,710
Total Assets: 1,142,950
Click here for the solution: (Comprehensive Accounting Cycle Problem) The following trial balance was prepared for Gifts, Etc., Inc., on December 31, 2010, after the closing entries were posted
The following trial balance was prepared for Gifts, Etc., Inc., on December 31, 2010, after the closing entries were posted.
AND SO ON
Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for 2011.
Check:
Net Income: $236,710
Total Assets: 1,142,950
Click here for the solution: (Comprehensive Accounting Cycle Problem) The following trial balance was prepared for Gifts, Etc., Inc., on December 31, 2010, after the closing entries were posted
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