Prepare a table similar to Exhibit 114 on (internal control objectives) for cashreceipts. EXHIBIT 11-4 Control Tests
Question:
Prepare a table similar to Exhibit 11–4 on (internal control objectives) for cashreceipts.
Transcribed Image Text:
EXHIBIT 11-4 Control Tests for Sales, Cash Receipts, and Receivables A. Sales 1. Select a sample of shipping documents: a. Scan for missing numbers b. Trace to related sales invoices. Completeness Completeness Completeness 2. Scan sales invoices for missing numbers in the sequence. 3. Select a sample of recorded sales invoices (sales journal) a. Perfomn recalculations to verity arithmetic accuracy b. Vouch to supporting shipping documents. Note dates and quantities. Accuracy Validity Proper period C. Vouch prices to approved price lists. d. Vouch credit approval. e. Trace posting to general ledger and proper customer account. Authorization Accounting 4. Observe customer order handling and invoice preparation work. B. Cash Receipts 1. Select a sample of recorded cash receipts (cash receipts joumal) a. Vouch to deposit slip and remittance ist. b. Trace to bank statement. C. Trace posting to general ledger accounts. d. Trace posting to subsidiary accounts. Validity Validity Accounting Accounting 2. Select a sample of rermittance lists (or daily cash reports) a. Trace to cash receipts journal b. Trace journal posting to general ledger C. Trace to bank statement. Completeness 3. Observe the work habits of cashiers and their interactions with persons Environment who keep cash records C. Accounts Receivable 1. Trace sales invoices to accounts receivable posting 2. Trace cash receipts to accounts receivable posting 3. Select a sample of credit memos: (procedure A-3-e above) procedure B-1-d above) a. Review for proper approval b. Trace to posting in customers' accounts. 4. Select a sample of customers' accounts: Validity Validity a. Vouch debits to supporting sales invoices. b. Vouch credits to supporting cash receipts documents and approved credit mermos 5. Observe mailing of monthly customer statements Validity
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (15 reviews)
Cash Receipts Control Objectives and Examples General Specific Validity 1 If the remittance advice i...View the full answer
Answered By
Bhartendu Goyal
Professional, Experienced, and Expert tutor who will provide speedy and to-the-point solutions. I have been teaching students for 5 years now in different subjects and it's truly been one of the most rewarding experiences of my life. I have also done one-to-one tutoring with 100+ students and help them achieve great subject knowledge. I have expertise in computer subjects like C++, C, Java, and Python programming and other computer Science related fields. Many of my student's parents message me that your lessons improved their children's grades and this is the best only thing you want as a tea...
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
Question Posted:
Students also viewed these Auditing questions
-
Prepare a table similar to that shown in Problem 7 b for cookies sold in a bakery. List what you believe are the three most important customer requirements (not including cost) and the three most...
-
Prepare a table similar to Figure 4-5 on page 129 and place each of these banking transactions in the appropriate cell of the table: a. Make a cash withdrawal from an automated banking machine (ABM)....
-
Prepare a table similar to Figure 4-5 on page 129. Then place each of these transactions in the appropriate cell of the table: a. Buy stamps from a postal clerk. b. Mail a package that involves...
-
Since perpetuity payments continue forever, how can a present value be computed? Why isnt the present value infinite?
-
What is the most common use of the covariate in ANCOVA?
-
Shown below in T-account format are the beginning and ending balances ($ in millions) of both inventory and accounts payable. Required: 1. Use a T-account analysis to determine the amount of cash...
-
Innovative Technologies Ltd uses a job order costing system to control costs in its two production departments. Factory overhead is applied on the basis of machine hours in the Construction...
-
Mile-High Microbrewery makes a light beer and a dark beer. Mile-High has a Limited supply of barley, limited bottling capacity and a limited market for light beer. Profits are $0.20 per bottle of...
-
As we approach the dissertation block, look at the current literature on doctoral student success. What are some issues that you have run into during your journey? What are some ways that you can...
-
A large car of mass 2m travels at speed v. A small car of mass m travels with a speed 2v. Both skid to a stop with the same coefficient of friction. (a) The small car will have (1) a longer, (2) the...
-
With reference to the Audit 11.3 case, how would an understanding of the business and management reporting system have contributed to discovery of the open cash receipts journal cutoff error?
-
The following auditee-prepared bank reconciliation is being examined by you during an audit of the financial statements of Cynthia Company: Required: Indicate one or more audit procedures that should...
-
Exoplex Industries Inc. is a diversified aerospace company, including two operating divisions, Semiconductors and Navigational Systems divisions. Condensed divisional Income statements, which involve...
-
Treasury Wine faces class action over US disclosure Treasury Wine Estates, the worlds largest pure-play winemaker, shocked markets and investors in July when it admitted an oversupply of poor and...
-
Refer to the extracts of the annual report of Woolworths Limited in this book's appendix. All questions relate to the consolidated accounts. 1. How were trade debtors valued in the accounts? 2....
-
A student chose LinkedIn to request a recommendation from his professor. The following message suffers from many writing faults, including poor tone and flawed persuasive strategy. Your Task. Analyze...
-
Besides the persuasive models introduced in this chapter, many more exist. One of the oldest and best-known modes of persuasion comes from Aristotle (384322 BC). The Greek philosopher identified four...
-
The following information comes from the records of Betty's Boutique. The NSF cheque was received from J. Pindar, a debtor. The direct credit represents an $800 bill collected by the bank, plus...
-
Compute d/dx x = 2 if (u) = u 2 , u(2) = 5, and u'(2) = 5.
-
Reduction in sales All of the above 29. Belt of an electric motor is broken, it needs a. Corrective maintenance b. Scheduled maintenance c. Preventive maintenance d. Timely maintenance. 30. The...
-
The fundamental equation used within an accounting balance sheet is a. net profit \(=\) gross profit - expenses - taxes. b. \(\quad\) assets + liabilities \(=\) net worth. c. assets + liabilities +...
-
1. How much was GAPs merchandise inventory valued at the lower of cost or market in the audited 2010 consolidated balance sheet? 2. Best Buy recognizes revenue from gift cards when (i) the gift card...
-
Identify a 90% RR for each of the following values: 1. What is the estimated net economic effect of BPs Gulf of Mexico oil spill? 2. How does BPs oil spill compare to those of other companies? 3....
-
What must the plaintiff prove in a common law action seeking recovery of damages from an independent auditor of financial statements? What must the defendant accountant do in such a court action?
-
- Let [121] A-03 1 4 12 If possible, find a matrix C such that 1 2 AC=01 41
-
Provide References In September of 2015, the EPA issued Volkswagen ( OTCPK:VLKAY ) a notice of violation of the Clean Air Act of 1963. The EPA accused the Volkswagen Group of intentionally...
-
2. Find c such that A is invertible 1 0 A= -1 -1 3 1 0 2c -4]
Study smarter with the SolutionInn App