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2 years ago

If an auditor is expected to detect the overstatement of sales, what should the auditor trace transactions from?.

1 answer:

7 0

If an auditor is asked to observe the overstatement of sales, the auditor trace transactions from The cash receipts diary should be linked to the sales journal.

<h3>How would an auditor detect the overstatement of sales?</h3>

The auditor detect the overstatement of sales are given below-

Observe a sample of transfers from the sales journal to the central ledger's sales account.
Approve a sample of sales from the sales diary to the shipment papers.

Thus, The cash receipts diary should be linked to the sales journal.

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During 2009, a particular country's inflation rate averaged 1.3% a day. This means that on average, prices went up by about 1.3%

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<span>29 days of 1.3% inflation. Convert to relative increase: (1+0.013) = 1.013. (1.013)^29 -1 = 45.43% (the effect of compounding) 45%.</span>

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4 years ago

Two individuals at a retail store work the same cash register. You evaluate this situation as Select one: a. Supporting internal

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Answer:

B. A violation of establishment of responsibility

Explanation:

They both should have established something different to work on but for both of them to work the same cash register, it is a violation of establishment of responsibility

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4 years ago

Windsor, Inc. was started on May 1. A summary of May transactions is presented below.

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Answer: See explanation

Explanation:

The tabular analysis of the transactions had been prepared and attached. The tabular analysis consist of heading such as cash, account receivable, supplies, equipment, account payable, common stock, revenue, expense and dividends.

Check the attachment for the solution.

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3 years ago

If a company is overly optimistic about debt collection, the company will understate bad debt expense and:

den301095 [7]

Answer:

overstate net income but days to collect will increase.

Explanation:

A bad debt expense is defined when any receivable is no more collectible as the customer is not able to fulfil or satisfy the obligation in order to pay the obligation of paying an outstanding debt because of some financial problems or due to bankruptcy.

Thus when any organization is more optimistic about the debt collection, it will understate the bad debt expenses and will also overstate the net income. But in this case the number of days to collect the payment increases.

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3 years ago

A company's financial records at the end of the year included the following amounts: Cash $70,000 Accounts Receivable 28,000 Sup

riadik2000 [5.3K]

The income statement for the year will show a net income of 87,000 during the financial year.

<h3>What is net income?</h3>

In business, net income refers to the amount of money left over after all expenditures have been paid, such as salaries and wages, the cost of items or raw materials, and taxes.

Net Income = Gross Profit — Operating Expenses — Other Business Expenses — Taxes — Interest on Debt + Other Income

Given:

Cash = $70,000

Accounts Receivable =28,000

Supplies= 4,000

Accounts Payable = 10,000

Notes Payable = 5,000

Retained Earnings, beginning of year = 17,000

Common Stock= 40,000

Service Revenue= 53,000

Wages Expense= 8,000

Advertising Expense = 5,000

Rent Expense = 10,000

so, the Net income during the given period will be :

NI = total revenue-total expenses

=1,02,000-15,000

=87,000

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2 years ago