Flashcards in Review Mods 1-5 Deck (11):
What affect does including items on consignment as sales have on the Accounts receivable turnover ratio?
Decreases the ratio, by equally increasing sales and receivables
Not including a sale in 20X2 sales, has what affect on accounts receivable turnover for 20X2?
Increases accounts receivable turnover ratio for 20X2
Because numerator and denominator decrease by the same
Higher interest rates on refinancing...
A cash shortage may be concealed by transporting funds from one location to another or by converting negotiable assets to cash. Because of this which of the following is vital?
The scope of an audit is not restricted when an attorney's response to an auditor as a result of a client's letter of audit inquiry limits response to...
Matters to which the attorney has given substantive attention
In the form of legal representation
If the entity's footnotes include a footnote on a related party transactions stating that the equivalent party transaction occurred on terms equivalent to those that would have prevailed in an arm's length transaction. This would cause an...
auditor to modify an unqualified opinion
2 audit procedures used to gather evidence on balance per bank
1 confirmation directly with bank
2 trace items on bank reconciliation to cutoff statement
What audit procedure should be performed to investigate a customer note collected by the bank?
Inspect bank credit memo
When an error for a check occurs, with the bank account being overcharged by the bank, what 2 audit procedures should be performed?
1 Inspect bank credit memo
2 trace items on the bank reconciliation to the cutoff statement
When financial statements of a company that follows GASB standards would be misleading due to unusual circumstances depart from those standards, the auditor should explain the circumstances in a separate paragraph and express an opinion that is...