During the course of the audit of Nature Sporting Goods for the year ended December 31, 2007,
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The accounts receivable confirmation work revealed one pricing error. The book value of $12,955.68 should be $11,984.00.The projected error based on this difference is $14,465. Nature Sporting Goods had understated the accrued vacation pay by $13,000. A review of the prior year documentation indicates the following uncorrected errors:
a. Accrued vacation pay was understated by $9,000.
b. Sales and accounts receivable were overstated by an estimated $60,000 due to cutoff errors.
Required
Prepare a summary of a possible adjustments schedule like the one in Exhibit and draw your conclusion about whether the aggregate effect of these errors is material. Nature Sporting Goods has made no adjustments to the trial balance numbers shown in Exhibit 16.4. Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
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