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3 years ago

Auditing :How to distinguish between test of control and substantive test

1 answer:

8 0

Test of controls is when you test controls surrounding a financial process . Substantive test are performed when one tests assertions surrounding a balance.

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Classify the following item as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle:

Semmy [17]

Answer:

d. Establish a $10,000 credit limit for a new customer

s. Collect payments on customer accounts

r. Sell a DVD player

l. Sell concert tickets

a. Purchase raw materials

e. Pay for raw materials

o. Pay utility bills

Expenditure

c. Hire a new assistant controller

f. Disburse payroll checks to factory workers

k. Record factory employee timecards

n. Send new employees to a business ethics course

q. Pay federal payroll taxes

u. Pay sales commissions

Human Resources/Payroll

g. Record goods received from a vendor

j. Complete a picking ticket for a customer order

i. Decide how many units to make next month

v. Send an order to a vendor

w. Put purchased goods into the warehouse

Production

b. Pay off mortgage on a factory

h. Update the allowance for doubtful accounts

m. Draw on line of credit

p. Pay property taxes on an office building

t. Obtain a bank loan

Financial Cycle

Explanation:

6 0

3 years ago

1. Under the system of awarding damages for bodily injury, death, or damage to property based upon the negligence of a driver, v

svetlana [45]

Answer:

Pay

Explanation:

Auto liability insurance helps offset the costs of bodily injuries and property damages to the other driver. The principle applies if you are the one at fault in the of an accident.

Auto liability insurance coverage is mandatory by law. It covers the medical expenses of the other party. In some circumstances, it may cover lost wages and legal fees in case the other party files a lawsuit. It also covers the repair or replacement cost of the other drivers' car.

4 0

3 years ago

You deposit $100 in an account that pays 6 percent annual interest, compounded quarterly. What will your deposit grow to in 3 ye

Burka [1]

Answer:

$119.56

Explanation:

We will use compound interest formula to solve this problem.

The formula is:

$F=P(1+r)^t$

Where

F is the future value

P is the present amount

r is the rate of interest per period

t is the number of periods

Here,

F is the value we want, after 3 years

P is the present amount, $100

r is the rate of interest per quarter (per period)

Given r = 6% annually, so that would make:

6%/4 = 1.5% per quarter, or 1.5/100 = 0.015

Also, t is the number of quarters in 3 years, that would be 4*3 = 12

Now, substituting, we get our answer:

$F=P(1+r)^t\\F=100(1+0.015)^{12}\\F=100(1.015)^{12}\\F=119.56$

The first answer choice is right, $119.56

3 0

3 years ago

Discounting cash flows involves

Triss [41]

Answer:

The correct answer is letter "D": discounting all expected future cash flows to reflect the time value of money.

Explanation:

Discounting cash flows takes place at any moment given when money is paid at one date but is received at a different point. Discounted cash flows are useful to measure the difference between the present value of money and the receivables that are expected to come at a later stage.

6 0

3 years ago

What is the difference between patronage and the merit principle?

alexdok [17]

Patronage principle based its hiring and promotion system on political reasons while the merit principle employed the idea that hiring should be based on entrance examination and promotion. One of the major disadvantage of the patronage principle is that, it may end up employing people who are not qualify for the job. Merit principle choose based on qualifications.

5 0

3 years ago