Question: Provide the applicable assertion that applies to the statement with the applicable assertion. An assertion can used more than once or not at all. Each

Provide the applicable assertion that applies to the statement with the applicable assertion. An assertion can used more than once or not at all. Each statement only has 1 assertion that applies. (10 marks)

Assertion List

Accuracy

Classification

Completeness

Cut-off

Existence

Occurrence

Rights and obligations

Valuation

  • The company made a large amount of sales right before year-end.

 Answer 1Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The companys cash balance has increased substantially compared to prior year.

 Answer 2Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The auditor is concerned that there might be damaged equipment.

 Answer 3Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The companys gross profit increased by 25% during the year, but administrative expenses also increased by 25% during the year. Gross profit is a key metric for managements bonus.

Answer 4Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The companys payroll has increased by 25% compared to the prior year.

 Answer 5Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • During the inventory count, the auditor found a box of televisions in the warehouse that did not appear on the inventory listing.

 Answer 6Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The company has not recorded any balance for allowance for doubtful accounts

 Answer 7Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • The bank uses the companys accounts receivable as collateral for their operating loan.

 Answer 8Choose...AccuracyRights and obligationsCompletenessValuationOccurrenceClassificationCut-offExistence

  • Sales increased substantially during the year compared to the prior year.

 Answer 9

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