Latest Posted Questions

On December 31, 2023, Berclair Incorporated had 540 million shares of common stock and 21 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2024,...
Marsha Solomon, a physiotherapist, opened a practice. The business completed the following transactions: After these transactions, how much cash does the business have to work with? Use T-accounts to...
Assume that Lululemon Athletica Inc. reported the following summarized data at December 31, 2020. Accounts appear in no particular order; dollar amounts are in millions. Prepare the trial balance of...
Refer to Exercise 2-3. Which of the transactions of Marsha Solomon, P.T., increased the total assets of the business? For each transaction, identify the asset that was increased or decreased....
Canada's Wonderland is an amusement park in Vaughan, Ontario. Over 3.5 million people visit Wonderland each year between May and October. It covers 330 acres and has more than 200 rides and...
The accounts of Custom Pool Service, Inc., follow with their normal balances at June 30, 2020. The accounts are listed in no particular order. Prepare the company's trial balance at June 30, 2020,...
Refer to exercise E2-17. Record the transactions in the journal of Joseph Ohara Dental Clinic Ltd. List the transactions by date, and give an explanation for each transaction. Exercise 2-17 Joseph...
Joseph Ohara opens a dental practice. During the first month of operation (March), the practice, titled Joseph Ohara Dental Clinic Ltd., experienced the following events: {Requirement} Dr. Ohara has...
The Gap has opened a new store in Ottawa, investing $\$ 100,000$ in cash in return for common shares of the new company that will operate the store. Susan Harper is the store's manager. During the...
Refer to exercise E2-19. {Requirements} 1. After journalizing the transactions of exercise E2-19, post the entries to the ledger using T-accounts. Key transactions by date. Date the ending balance of...
Perfect Printers Inc. completed the following transactions during October 2020, its first month of operations: {Requirement} 1. Record the transactions in the journal of Perfect Printers Inc. Key...
The trial balance of Sam's Deli Inc. at October 31, 2020, does not balance: The accounting records contain the following errors: a. Recorded a $\$ 1,000$ cash revenue transaction by debiting...
The accounts of Victoria Garden Care Ltd. follow with their normal balances at September 30, 2020. The accounts are listed in no particular order. {Requirements} 1. Prepare the company's trial...
Wieb Narketing Servicis Inc. completed these transactions during the first part of January 2020: {Requirements} 1. Set up I-accounts for Cash, Accounts Receivable, Supplies, Equipment, Furniture,...
The trial balance of 4AC, Inc., at October 31, 2020, does not balance. {Requirements} 1. Prepare a trial balance for the ledger accounts of 4AC, Inc., as of October 31, 2020. 2. Determine the...
Refer to exercise E2-24 {Requirements} 1. After recording the transactions in exercise E2-24, prepare the trial balance of Sonia Rothesay, Accountant, at May 31, 2020. 2. How well did the business...
Set up the following T-accounts: Cash, Accounts Receivable, Office Supplies, Office Furniture, Accounts Payable, Share Capital, Dividends, Service Revenue, Salary Expense, and Rent Expense. Record...
The trial balance of You Build Inc. at December 31, 2020, does not balance. {Requirements} 1. How much out of balance is the trial balance? Assume the error lies in the Accounts Receivable account....
Following is selected financial information for the Canadiana Gallery Ltd. for the month of March: {Requirement} Provide the gallery's manager with the following information for March: a. Total cash...
The following amounts summarize the financial position of Blythe Spirit Consulting, Inc. on May 31, 2020: During June 2020, the business completed these transactions: a. Received cash of \(\$...
The trial balance of Amusement Specialties Inc. follows: Sue Sibalius, your best friend, is considering investing in Amusement Specialties Inc. She seeks your advice in interpreting this information....
This question concerns the items and the amounts that two entities. City of Regina and Public Health Organization, Inc. (PHO), should report in their financial statements. During August, PHO provided...
Use this problem in conjunction with Problem P2-33. {Requirements} 1. Journalize the transactions of Blythe Spirit Consulting, Inc. Explanations are not required. 2. Set up the following T-accounts:...
During October, All Pets Veterinary Clinic Ltd. completed the following transactions: The clinic uses the following accounts: Cash, Accounts Receivable, Supplies, Land, Accounts Payable, Notes...
Mountain View Estates Ltd. experienced the following events during the organizing phase and its first month of operations. Some of the events were personal and did not affect the business. Others...
The owners of Opera Tours Inc. are selling the business. They offer the trial balance that appears at the top of the next page to prospective buyers. Your best friend is considering buying Opera...
During the first month of operations (January 2020), Music Services Ltd. completed the following selected transactions: a. The business has cash of $\$ 10,000$ and a building valued at \(\$...
During the first month of operations, May 2020, New Pane Windows Inc. completed the following transactions: {Requirements} 1. Record each transaction in the journal using account titles that...
Use this problem in conjunction with problem P2-40B. {Requirements} 1. Journalize the transactions of DH Designers, Inc. Explanations are not required. 2. Set up the following T-accounts: Cash,...
Doug Hanna operates and is the major shareholder of an interior design studio called DH Designers, Inc. The following amounts summarize the financial position of the business on April 30, 2020:...
Wimberley Glass, Inc. has shops in the shopping malls of a major metropolitan area. The business completed the following transactions: Wimberley Glass, Inc. uses the following accounts: Cash,...
Lane Kohler opened a consulting practice that he operates as a corporation. The name of the new entity is Lane Kohler, Consultant, Inc. Kohler experienced the following events during the organizing...
During the first month of operations, October 2020, Barron Environmental Services Inc. completed the following transactions: {Requirements} 1. Record each transaction in the journal using the account...
If Handel Company uses the cash basis of accounting (instead of the accrual basis, in what month will Handel report revenue and in what month will it report expense? Revenue a. September Expense...
In which month should Handel report the $\$ 25$ revenue on its income statement? a. July b. August c. September d. October
In which month should Handel record the cost of the music supplies as an expense? a. July b. August c. September d. October
During the first month of operations (June 2020), Schulich Graphics Service Inc. completed the following selected transactions: a. Began the business with an investment of $\$ 20,000$ cash and a...
An adjusting entry recorded March salary expense that will be paid in April. Which statement best describes the effect of this adjusting entry on the company's accounting equation at the end of...
What effect does the adjusting entry in Question 3-6 have on Aladdin's net income for February? a. increase by $\$ 100$ b. increase by $\$ 200$ c. decrease by $\$ 100$ d. decrease by $\$ 200$
Assume the same facts as in the previous problem. Aladdin's adjusting entry at the end of February should include a debit to Rent Expense in the amount of a. $\$ 0$. b. $\$ 500$. c. $\$ 200$....
In which month should revenue be recorded? a. In the month that goods are ordered by the customer b. In the month that goods are shipped to the customer c. In the month that the invoice is mailed to...
On April 1, 2020, Metro Insurance Company sold a oneyear insurance policy covering the year ended April 1, 2021. Metro collected the full $\$ 1,200$ on April 1, 2020. Metro made the following...
On January 1 of the current year, Aladdin Company paid (\$600 rent to cover six months (January through June). Aladdin recorded this transaction as follows: Aladdin adjusts the accounts at the end of...
A major purpose of preparing closing entries is to a. zero out the liability accounts. b. close out the Supplies account. c. adjust the asset accounts to their correct current balances. d. update the...
Which of the following accounts would not be included in the closing entries? a. Accumulated Depreciation b. Service Revenue c. Depreciation Expense d. Retained Earnings
For 2020, Monterrey Company had revenues in excess of expenses. Which statement describes Monterrey's closing entries at the end of 2020 ? a. Revenues will be debited, expenses will be credited, and...
What is the effect on the financial statements of recording depreciation on equipment? a. Assets are decreased, but net income and shareholders' equity are not affected. b. Net income, assets, and...
The Unearned Revenue account of Dean Incorporated Wegan 2020 with a normal balance of $\$ 5,000$ and ended 2020 with a normal balance of $\$ 12,000$. During 2020, the Unearned Revenue account was...
Which journal entry records your payment for the supplies purchased in transaction 4? a. Accounts Payable.. 1,000 Accounts Receivable 1,000 b. Supplies 1,000 Cash 1,000 c. Cash 1,000 Accounts Payable...
Suppose your business has cash of $50,000, receivables of $60,000, and furni- ture totaling $200,000. The store owes $80,000 on account and has a $100,000 note payable. How much is your equity? a....
Which sequence correctly summarizes the accounting process? a. Journalize transactions, post to the accounts, prepare a trial balance b. Post to the accounts, journalize transactions, prepare a trial...
Selected data for Austin Company follow: Current assets..... $50,000 Current liabilities......... $40,000 Capital assets...... 70,000 Long-term liabilities... 35,000 Total revenues.... 30,000 Total...
Brett Wilkinson, Attorney, began the year with total assets of $120,000, liabilities of $70,000, and owners equity of $50,000. During the year he earned reve- nue of $1 10,000 and paid expenses of...
You paid $500 for supplies and purchased additional supplies on account for $700. Later you paid $300 of the accounts payable. What is the balance in your Supplies account? a. $500 b. $900 c. $1,500...
Posting a $1,000 purchase of supplies on account appears as follows: Supplies Accounts Payable 1,000 Accounts Receivable 1,000 a. b. c. 1,000 Supplies 1,000 Supplies Accounts Payable 1,000 1,000 d....
Return to Cookie Lapp Travel Design's trial balance . Assume that Lapp accidentally listed her withdrawals as $\$ 200$ instead of the correct amount of $\$ 2,000$. Compute the incorrect trial...
How would Brett Wilkinson record his expenses for the year in question 9? a. Expenses 30,000 Accounts Payable 30,000 b. Expenses 30,000 Cash 30,000 c. Cash...... 30,000 Expenses 30,000 d. Accounts...
Mark Brown opened a medical practice in Alexandria, Virginia. Record the following transactions in the journal of Mark Brown, M.D. Include an explanation with each entry. June 1 Brown invested...
The journal of Alert Defensive Driving includes the following entries for May 2006. Requirements 1. Describe each transaction. 2. Set up T-accounts using the following account numbers: Cash, 110 ;...
Woodward Technology Solutions completed the following transactions during August 2007, its first month of operations: Requirement Record the preceding transactions in the journal of Woodward...
Prepare the trial balance of Reed's Home Care at October 31, 2007, using the accounts from Exercise 2-21. Exercise 2-21 The first five transactions of Reed's Home Care, have been posted to the...
The accounts of Mayflower Moving Company follow with their normal balances at December 31, 2006. The accounts are listed in no particular order. Requirement Prepare Mayflower's trial balance at...
Amber Shea, owner of the Shea Law Firm, is considering adding another lawyer. Courtney Martinez is considering joining Shea and asks to see Shea's financial information. Shea gives Martinez the...
After recording and posting the transactions in Exercise 2-24, prepare the trial balance of Lee Bivona, CPA, at December 31, 2007. Exercise 2-24 Open the following four-column accounts of Lee Bivona,...
Open the following four-column accounts of Lee Bivona, CPA: Cash; Accounts Receivable; Office Supplies; Office Furniture; Accounts Payable; Lee Bivona, Capital; Lee Bivona, Withdrawals; Service...
Doris Higgins started her practice as a design consultant on September 1 of the current year. During the first month of operations, the business completed the following transactions: Requirement Open...
Showtime Amusements owns movie theaters. Showtime engaged in the following business transactions: Showtime Amusements uses the following accounts: Cash; Supplies; Building; Accounts Payable; Notes...
Judy Kroll, owner of A+ Fire \& Safety, is selling the business. Kroll offers the following trial balance to prospective buyers. Your best friend is considering buying the company. He seeks your...
The trial balance of John Hilton, CPA, is dated January 31, 2007: Requirements 1. Record the February transactions on page 3 of the journal. Include an explanation for each entry. 2. Post the...
Dan Bell practices medicine under the business title Dan Bell, M.D. During April, his medical practice engaged in the following transactions: Bell's business uses the following accounts: Cash;...
Body Studio gains a client who prepays $\$ 600$ for a package of six physical training sessions. Body Studio collects the $\$ 600$ in advance and will provide the training later. After two...
Which types of adjusting entries are natural opposites? a. Prepaids and accruals b. Expenses and revenues c. Prepaids and depreciation d. Net income and net loss
Adjusting the accounts is the process of a. Zeroing out account balances to prepare for the next period b. Subtracting expenses from revenues to measure net income c. Recording transactions as they...
The revenue principle says a. Divide time into annual periods to measure revenue properly. b. Record revenue after you receive cash. c. Measure revenues and expenses in order to compute net income....
What are the distinctive features of accrual accounting and cash-basis accounting? a. Cash-basis accounting records all transactions. b. Accrual accounting records only receivables, payables, and...
Refer to Problem 2-41B. After completing the trial balance in Problem 2-41B, prepare the following financial state- ments for Serrano Carpet Installers: 1. Income statement for the month ended...
Vince Serrano started Serrano Carpet Installers, and during the first month of operations (January 2007) he completed the following selected transactions: a. Serrano began the business with an...
Cookie Lapp Travel borrowed $\$ 50,000$ on October 1 by signing a one year note payable to Community One Bank. Lapp's interest expense for the remainder of the year (October through December) is...
Suppose on January 1 you prepaid apartment rent of $\$ 3,600$ for the ful\} year. At September 30, what are your two account balances for this situation? Identify the two accounts and give their...
Accounting data flow from the a. Balance sheet to the income statement b. Income statement to the statement of owner's equity c. Statement of owner's equity to the balance sheet d. Both $b$ and...
The adjusted trial balance shows a. Amounts that may be out of balance b. Revenues and expenses only c. Amounts ready for the financial statements d. Assets, liabilities, and owner's equity only
Assume you prepay Body Studio for a package of six physical training sessions. Which type of account should you have in your records? a. Prepaid expense b. Accrued expense c. Accrued revenue d....
Unearned revenue is always a (an) a. Asset b. Revenue c. Liability d. Owner's equity because you collected the cash in advance
Best Yet Catering completed the following selected transactions during April: Show whether each transaction would be handled as a revenue or an expense using the accrual basis. Give the amount of...
Merry Maids, the cleaning service, started the preparation of its adjusted trial balance as follows: During the six months ended June 30, 2007, Merry Maids: a. Used supplies of $\$ 1,500$. b. Used...
Journalize the adjusting entry needed at December 31 for each of the following independent situations. a. On October 1, we collected $\$ 4,000$ rent in advance, debiting Cash and crediting Unearned...
Suppose you start up your own photography business to shoot videos at college parties. The freshman class pays you $$100$ in advance just to guarantee your services for its party. The sophomore...
Identify the accounting concept or principle (there may be more than one) that gives the most direction on how to account for each of the following situations: a. The owner of a business desires...
The adjusted trial balance of Job Link Employment Service is incomplete. Enter the adjustment amounts directly in the Adjustments columns below. JOB LINK EMPLOYMENT SERVICE Preparation of Adjusted...
Lake Air Interiors began the year with capital of $$20,000.$ On July 12, Cynthia Norcross (the owner) invested $$12,000$ cash in the business. On September 26, Xorcross transferred to the company...
The trial balance of Dynaclean Air Purification Systems at November 30, 2007, and the data needed for the month-end adjustments follow. Adjustment data at November 30 : a. Unearned service revenue...
Tee's Golf School completed the following transactions during January: Requirements 1. Show how each transaction would be handled using the accrual basis of accounting. Give the amount of revenue or...
Consider the unadjusted trial balance of Hummer Limo Service at October 31, 2007, and the related month-end adjustment data. Adjustment data: a. Accrued service revenue at October $31, \$ 2,000$....
The adjusted trial balance of Festive Occasions Party Planners at December 31,2008 , follows. Requirements 1. Prepare Festive Occasions' 2008 income statement and statement of owner's equity and...
Multiplex Medical Clinic completed these transactions during October: Requirements 1. Show how each transaction would be handled using the accrual basis of accounting. Give the amount of revenue or...
The trial balance of Lexington Inn at December 31, 2008, and the data needed for the month-end adjustments follow. Adjustment data at December 31: a. Prepaid insurance still in force, $\$ 600$. b....
Journalize the adjusting entry needed on December 31, end of the current year, for each of the following independent cases affecting MidAmerica Water Park. a. Details of Prepaid Insurance are shown...
The adjusted trial balance of Snyder Piano Tuning Service at December 31, 2007 , follows. Requirements 1. Prepare the 2007 income statement, statement of owner's equity; and year-end balance sheet of...
A simple random sample of size 13 has mean x = 7.26 and standard deviation s = 2.45. The population is approximately normally distributed. Can you conclude that the population mean differs from 9?...
A simple random sample of size 65 has mean x = 38.16. The population standard deviation is = 5.95. Can you conclude that the mean is less than 40? Use the = 0.01 level of significance. In Exercises...
A simple random sample of size 7 has mean x = 32.5 and standard deviation s = 8.27. The population is normally distributed. Can you conclude that the population standard deviation is greater than 6?...
A simple random sample of size 15 has mean x = 27.72 and standard deviation s = 8.21. The population is approximately normally distributed. Can you conclude that the population mean differs from 35?...
In a simple random sample of 150 cars undergoing emissions testing, 23 failed the test. Can you conclude that the proportion of cars that fail the test is less than 20%? Use the = 0.05 level of...
The unadjusted trial balance of Solar Energy Consulting at July 31, 2007, and the related month-end adjustment data follow. Adjustment data: a. Accrued service revenue at July $31, \$ 2,000$, b....
A simple random sample of size 65 has mean x = 57.3. The population standard deviation is = 12.6. Can you conclude that the population mean is less than 60? Use the = 0.05 level of significance. In...
A simple random sample of size 16 has mean x = 4.1 and standard deviation s = 6.2. The population is normally distributed. Can you conclude that the population standard deviation is greater than 5?...
Following are the weights of 8 boxes of cookies, each of which is labeled as containing 16 ounces. Assume that the population of weights is normally distributed. Can you conclude that the population...
The U.S. Census Bureau reported that the mean area of U.S. homes built in 2015 was 2467 square feet. Assume that a simple random sample of 20 homes built in 2017 had a mean area of 2543 square feet,...
In a survey of 909 U.S. adults with children conducted by the Financial Industry Regulatory Authority, 309 said that they had saved money for their childrens college education. Can you conclude that...
A simple random sample of size 22 has mean x = 91.7 and standard deviation s = 19.3. The population is normally distributed. Can you conclude that the population standard deviation is greater than...
In a simple random sample of 95 families, 70 had one or more pets at home. Can you conclude that the proportion of families with one or more pets differs from 0.6? Use the = 0.01 level of...
A simple random sample of size 6 has mean x = 5.49 and standard deviation s = 2.37. The population is approximately normally distributed. Can you conclude that the population mean is greater than 4?...
A simple random sample of size 23 has mean x = 41.8. The population standard deviation is = 3.72. Can you conclude that the population mean differs from 40? Use the = 0.05 level of significance. In...
In a simple random sample of 120 law students, 54 were women. Can you conclude that less than half of law students are women? Use the = 0.01 level of significance. In Exercises 512, state which type...
Speeds for a sample of nine cars were measured by radar along a stretch of highway. The results, in miles per hour, were as follows. Assume that the population of speeds is normally distributed. Can...
A random sample of 50 public school teachers in Georgia had a mean annual salary of $48,300. Assume the population standard deviation is = $8,000. Can you conclude that the mean salary of public...
The General Social Survey asked 514 people whether they had ever considered a career in science, and 178 said that they had. Can you conclude that more than 30% of people have considered a career in...
For testing the hypotheses H0 : = 10 versus H1: < 10 at the = 0.05 level, assume the population standard deviation is = 3 and the sample size is n = 50. Find the power against the alternative 1 =...
A random sample of 100 pairs of ladies shoes had a mean size of 8.3. Assume the population standard deviation is = 1.5. Can you conclude that the mean size of ladies shoes differs from 8? Use the =...
Mercury is a toxic metal that is used in many industrial applications. Seven measurements, in milligrams per cubic meter, were taken of the mercury concentration in a lake, with the following...
The greater the power, the less likely we are to make a __________________ error. In Exercises 35, fill in each blank with the appropriate word or phrase.
For testing the hypotheses H0 : = 35 versus H1: > 35 at the = 0.01 level, assume the population standard deviation is = 10 and the sample size is n = 100. Find the power against the alternative 1...
If the sample size is increased, the power will ____________________. In Exercises 35, fill in each blank with the appropriate word or phrase.
The power is the probability of rejecting H0 when it is __________________ . In Exercises 35, fill in each blank with the appropriate word or phrase.
For a test about the population mean, the power of a test depends on a specified value that satisfies the alternate hypothesis. In Exercises 68, determine whether the statement is true or false. If...
The power is the probability of making a Type I error. In Exercises 68, determine whether the statement is true or false. If the statement is false, rewrite it as a true statement.
Once the significance level ???? has been chosen, the only way to increase the power of a test is to decrease the sample size. In Exercises 68, determine whether the statement is true or false. If...
Refer to Exercise 11. A test of the hypotheses H0: = 50,000 versus H1: 50,000 will be made at the = 0.05 level of significance. Assume that the standard deviation of tire lifetimes is = 5000 and...
Refer to Exercise 12. A test of the hypotheses H0: ???? = 10 versus H1: 10 will be made at the = 0.05 level of significance. Assume that the standard deviation of moisture content is = 5.0 and...
An article in the International Journal of Clinical Practice described a study in which a sample of 314 patients took a combination of the drugs ezetimibe and simvastatin in order to reduce their...
A college admissions officer will draw a simple random sample of 100 mathematics SAT scores from the entering freshman class. The admissions officer will perform a test of the hypotheses H0: = 500...
Shipments of coffee beans are checked for moisture content. A high moisture content indicates water contamination and will result in the shipment being rejected. Let represent the mean water content...
A tire company claims that the lifetimes of its tires average 50,000 miles. The standard deviation of tire lifetimes is known to be = 5000 miles. You sample 100 tires and will test the hypotheses...
A marketing firm samples 150 residents of a certain town to determine the sample proportion p that have seen a new advertisement. A test of the hypotheses H0: p = 0.4 versus H1: p a. Find the...
Refer to Exercise 14. A test of the hypotheses H0: = 1 versus H1: 1 will be made at the = 0.01 level of significance. Assume that the population standard deviation is = 0.2 and that the sample...
Refer to Exercise 13. The admissions officer will perform a test of the hypotheses H0: = 500 versus H1: 500 at the = 0.01 level of significance. Assume that the population standard deviation is ...
A hypothesis test results in a P-value of 0.008. Which is the best conclusion? i. H0 is definitely false. ii. H0 is definitely true. iii. H0 is plausible. iv. H0 might be true, but its very unlikely....
A test will be made of H0: = 4 versus H1: > 4, using a sample of size 25. The population standard deviation is unknown. Find the critical value of the test statistic if the significance level is =...
A sample of size 8 is drawn from a normal population with mean , and the population standard deviation is unknown. a. Is it appropriate to perform a z-test? Explain. b. Is it appropriate to perform a...
A null hypothesis is rejected at the = 0.05 level. True or false: a. The P-value is greater than 0.05. b. The P-value is less than or equal to 0.05. c. The result is statistically significant at the...
True or false: If P = 0.03, then a. The result is statistically significant at the = 0.05 level. b. The result is statistically significant at the = 0.01 level. c. The null hypothesis is rejected...
For testing H0: = 3 versus H1: < 3, a P-value of 0.024 is obtained. a. If the significance level is = 0.05, would you conclude that < 3? Explain. b. If the significance level is = 0.01, would...
In a random sample of 500 people who took their drivers test, 445 passed. Let p be the population proportion who pass. A test will be made of H0: p = 0.85 versus H1: p > 0.85. a. Compute the value of...
True or false: We never conclude that H0 is true.
The result of a hypothesis test is reported as follows: We reject H0 at the = 0.05 level. What additional information should be included?
True or false: When we reject H0, we are certain that H1 is true.
A random sample of size 20 from a normal population has sample standard deviation s = 10. Test H0: = 15 versus H1: < 15. Use the = 0.05 level.
True or false: We can perform a test for a standard deviation only when the population is almost exactly normal.
In a test of H0: = 5 versus H1: > 5, the value of the test statistic is t = 2.96. There are 17 degrees of freedom. Do you reject H0 at the = 0.05 level?
A test of H0: = 50 versus H1: > 50 will be made at a significance level of = 0.05. The population standard deviation is = 10 and the sample size is n = 60. Find the power of the test against the...
The following questions relate to financial auditing and auditing standards. Select the best response. a. The first general standard requires that a person or persons have adequate technical training...
For each one of the following statements, indicate whether the statement is true or false. a. During the early 1900s a statutory requirement for audits resulted in rapid development of the accounting...
The following questions relate to audit reporting standards. Select the best response. a. The first standard of reporting requires that, "the report shall state whether the financial statements are...
The following questions relate to modification of the standard audit report. Select the best response. a. When the client fails to include information that is necessary for the fair presentation of...
List several reasons the following types of organizations would want to have an annual audit by a CPA. Church Municipal government Local United Fund organization Labor union National hobby...
The following statement on one objective of an audit appeared in Principles of Accounting by William A. Paton and Russell A. Stevenson, published by The Ann Arbor Press in 1916: A large number of...
In connection with current problems relating to audited financial statements it has been stated that: The bulk of the problems can be traced to a single crucial flaw in the basic structure (of the...
It has been observed that "there is a certain apparent similarity between notes to financial statements and qualifications in the auditor's report: both are means by which the auditor may be certain...
The independent auditor issues a report at the end of the audit. Refer to the standard report in the chapter. 1 What is the difference between (a) "generally accepted auditing standards" and (b)...
On page 29 is an actual auditor's report rendered in 1927 by Touche, Niven & Co., on the financial statements of The Studebaker Corporation. 1 Explain what representations are made by the auditor. 2...
Discuss the following observation recently made by a businessman: "Published financial statements should be designed to enable the efficiency and skill of management to be evaluated."
Minker expresses an unqualified opinion concerning the financial statements of the Zee Company, in which statements the basis of valuation of the fixed assets is not shown. She is aware of the fact...
The following statements refer to the standard auditor's report. List the numbers of the statements that are not appropriate in the currently used report. 1. We have examined the balance sheet. . . ....
Beth Jones & Co. has grown from a small firm that originally included only Ms. Jones and one junior accountant to a regional firm with 7 partners and 21 professional staff members occupying four...
Coleson is practicing on his own account and has audited the books of the Koltron Company for many years. This year, as a result of a press of duties, he is able to spend only enough time to read the...
In the South African Chartered Accountant's Handbook, the following statement appears: The term "Auditing Principles and Standards" appears to connote or to suggest one proposition and it is perhaps...
Technical accounting and auditing ability, supervisory ability, public relations ability, good judgment, and general decision-making ability are all important to the operation of an audit firm. Which...
Until about 1945, staff accountants were hired at very low pay on a seasonal basis. They often worked only from December through the following March to become unemployed, at least as auditors, until...
Sidney Wells is an individual practitioner. In addition to himself, he maintains a professional staff of five auditors, and his firm is a member of a regional group of CPA firms. Wells is considering...
Large CPA firms take two different approaches to the scheduling of professional staff members to audit engagements. Some firms schedule staff members individually. Using this approach, a new staff...
Independence is one characteristic that distinguishes independent auditing from inter- nal auditing. The Institute of Internal Auditors, however, stresses the importance of independence in the...
The GAO has adopted standards for performance audits. The second field work standard states: Staff are to be properly supervised. The fourth field work standard for government performance audits is:...
Distinguish between a performance audit and a financial audit.
The U.S. Governmental Accounting Office "Yellow Book" states that the third field work standard for government performance audits is: An assessment is to be made of compliance with applicable...
Following are the financial statements of the Anchor Manufacturing Corporation and the auditor's report for the year ended January 31, 19X4. The audit was conducted by James Haas, an individual...
For each one of the following statements indicate whether the statement is true or false. a. The essential difference between professional and nonprofessional work is the professional's need for...
The following questions relate to quality control and peer review. Select the best response. a. A firm of CPAs may use policies and procedures such as notifying professional personnel as to the names...
During 19X6 your client, Mark Corporation, requested that you conduct a feasibility study to advise management of the best way the corporation can utilize electronic data processing equipment and...
Bald Eagle Corporation was formed on October 1, 19X4, and its fiscal year will end on September 30, 19X5. You audited the corporation's opening balance sheet and rendered an unqualified opinion on...
This question relates to the attribute of independence associated with the CPA's function of auditing and expressing opinions on financial statements. Required : a. What is meant by "independence" as...
The following questions relate to the auditors' legal liability. Select the best response. a. DMO Enterprises, Inc., engaged the accounting firm of Martin, Seals & Anderson to perform its annual...
A firm of certified public accountants is considering the use of an outside mailing service to handle confirmations of the accounts receivable of clients upon whose financial statements the firm is...
In each of the following unrelated circumstances, explain what course of action a CPA should follow in order to discharge his or her professional and ethical responsibilities: 1. Nobles is employed...
Winston Gould is the controlling shareholder of Gould, Inc., a closely held corporation. He has expressed dissatisfaction with his present auditors and informs Henry Cramer, a CPA and member of the...
Legally, the SEC has the authority to specify accounting principles and practices and thereby completely regulate accounting practice. It has chosen not to do this, but rather to work with the AICPA...
Carlson, a CPA, is engaged in a fee dispute with a client. Carlson has in his possession various client records and decides to withhold them until such time as the client satisfies his bill. He notes...
1 What is the legal relationship of an independent accountant (auditor) to a client? Explain. 2 What is the legal duty of skill and care that the accountant-client relationship imposes upon the...
Factory Discount Prices Inc., is a chain store discount outlet which sells women's clothes. It has an excessively large inventory on hand and is in urgent need of additional cash. It is bordering on...
The following questions relate to types of audit tests. Select the best response. a The auditor is examining copies of sales invoices only for the initials of the person responsible for checking the...
For each one of the following statements indicate whether the statement is true or false. a. Each of the standards of field work is independent and describes a separate goal of the auditor in...
The following questions relate to evidential matter and work papers. Select the best response. a. Audit evidence can come in different forms with different degrees of persuasiveness. Which of the...
In the chapter there is an illustration of specific audit objectives for inventory developed from the broad categories of assertions. For the account balance accounts receivable, develop one specific...
Five broad categories of assertions apply to account balances and classes of transactions. Identify and explain the aspects of each assertion that apply to transac- tions and those that apply to...
In the chapter there is an illustration of specific audit objectives developed from the broad categories of assertions for inventory. For the account balance accounts payable, develop one specific...
Using the illustration of specific audit objectives for inventory in the chapter, identify the general categories of audit procedures that could be used to achieve the audit objective and give at...
Listed below are errors that the application of audit procedures may detect related to inventory. For each error identify the broad category of assertion involved. a. Some inventory items are out on...
You are engaged to audit the financial statements of a central school district. The district has an elected treasurer and a clerk of the board of education who is appointed by the board. Each of...
You have been instructed to audit the financial statements of Christi Manufacturing Company. You are furnished the following condensed balance sheet: Your assistant will be carrying out most of the...
Indicate which one item in each of the following groups of items of evidence you would consider to be of superior reliability, and briefly explain why. 1 In support of the recorded cost of purchased...
Listed below are specific audit procedures. For each procedure indicate the type of error the procedure would be likely to detect and the broad category of assertion to which it is related. a....

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