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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Answer:
Net income will be decreased by $150.
Explanation:
Given:
The credit balance of interest payable (Opening) = $200
Credit balance of interest payable (Closing) = $50
Net income will be decreased by $150.
Decreased net income = credit balance of payable (Opening) - credit balance (Closing)
Decreased net income = $200 - $50
Decreased net income = $150
The interest of $150 was paid which would reduce the net profit.
Answer:
The minimum value is $196,362.95
Explanation:
Giving the following information:
Cash flow= $20,000
The number of years= 20 years
Interest rate= 8%
First, we need to calculate the future value of the cash flows. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= cash flow
FV= {20,000*[(1.08^20)-1]} /0.08
FV= $915,239.29
Now, we can calculate the present value. The present value is the minimum value yo accept.
PV= FV/(1+i)^n
PV= 915,239.29/ 1.08^20
PV= $196,362.95
