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mel-nik [20]
3 years ago
6

A common step in the testing for accounts payable is to test subsequent disbursements for improper/proper inclusion/exclusion in

year-end accounts payable CONCEPT REVIEW A common way to test accounts payable is to examine the check register after period end and make selections for testing. Items are selected and then examined for detail. A determination is then made to conclude whether the amount should have been a liability as of year-end and, if so, if it was recorded as such
1. When searching for unrecorded liabilities, the auditors consider transactions recorded__________year end.
2. Accounts payable __________can be mailed to vendors from whom substantial purchases have been made.
3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider _________.
4. When auditors find unrecorded liabilities, before adjusting they must consider __________.
5 Auditiors need to consider_______ terms for determining ownership and whether a liability should be recorded.
Business
1 answer:
galben [10]3 years ago
6 0

Answer:

1. When searching for unrecorded liabilities, the auditors consider transactions recorded <u>after</u> year end.

<em>Auditors consider transactions recorded after year end to determine if it was supposed to be recorded in the current period. </em>

2. Accounts payable <u>confirmation</u> can be mailed to vendors from whom substantial purchases have been made.

<em>As a way to keep a document trail, creditors from whom substantial goods were bought from can be mailed a confirmation. </em>

3. To gain overall assurance as to the reasonableness of accounts payable, the auditor may consider <u>ratios</u>.

<em>Ratios such as the Payables turnover can be used to evaluate the reasonableness of Accounts payable. </em>

4. When auditors find unrecorded liabilities, before adjusting they must consider <u>materiality</u>.

<em> They must consider if the adjustment is material or significant enough to record. </em>

5 Auditiors need to consider <u>shipping terms</u> terms for determining ownership and whether a liability should be recorded.

<em>Shipping terms need to be considered because they can tell who owns goods in transit and therefore if a liability is needed for them. Shipping terms such as FOB Shipping point mean that the business incurs the liability as soon as the seller ships the goods. </em>

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