Download LSU ACCT 3222 Chp 12 & 13 - Final Exam Questions and Answers with Complete Solutions 100% and more Exams Advanced Education in PDF only on Docsity! LSU ACCT 3222 Chp 12 & 13 - Final Exam Questions and Answers with Complete Solutions 100% Correct | 2024 What assertion is most important in auditing payables and liabilities? - Correct Answer-completeness What assertion is tested when performing initial procedures for A/P balances? - Correct Answer-valuation 4 initial procedures for A/P - Correct Answer-1. agree BB to PY 2. obtain A/P TB 3. scan for unusual transactions 4. agree sub ledger to GL In auditing which accounts are substantive procedures optional? - Correct Answer-payables/ liabilities CASH (not meaningful bc of high fluctuation) 3 test of details of transactions of transactions for A/P - Correct Answer-1. Vouch pg. 1 professoraxe l 2. Perform cutoff tests 3. Perform search for unrecorded liabilities Which of the test of details of transactions for A/P is more powerful in testing completeness? - Correct Answer-Perform search for unrecorded liabilities During cutoff testing for A/P, which transactions regarding shipment should the client record if they are the purchaser? What if they are the seller? - Correct Answer-Purchaser: if FOB shipping point, anything shipped before or on YE if FOB destination, client should record anything received before or on YE Seller: if FOB shipping point, ownership transfers if shipped before/on YE if FOB destination, client still owns anything still in transit on YE 3 procedures done when performing the search for unrecorded liabilites during the test of details of transactions? - Correct Answer-1. inspect subsequent cash disbursements pg. 2 professoraxe l How should the client avoid kiting with bank transactions? - Correct Answer-book dates should be the same for both accounts at the different banks to avoid a double count 2 procedures when testing the details of balances when auditing CASH? - Correct Answer-- confirm cash balances - reperform client's YE bank rec & trace to cutoff bank statement Which assertions does confirming cash balances during test of details of balances test? - Correct Answer-existence completeness valuation rights/obligations When should the auditor request the cutoff bank statement in test of details of balances for CASH? - Correct Answer-after YE - January 4 accounts/items to look for when testing details of presentation and disclosure for cash? - Correct Answer-1. bond-sinking fund pg. 5 professoraxe l 2. restrictions on cash balances 3. lines of credit (debt) 4. bank overdraft (report as current liab) What is a bond sinking fund? How should this be recorded? - Correct Answer-when a company is setting cash aside to pay off a future bond record as LT investment Why is cash a low risk account? - Correct Answer-it is kept in a 3rd party (bank) lower volume of transaction but higher in value - Correct Answer-PPE 6 activities what occur with PPE - Correct Answer-1. Acquisitions 2. Depreciation 3. Leasing 4. Maintenance/Repairs Expenses pg. 6 professoraxe l 5. Dispositions 6. Impairments What are the audit procedures for PPE? (5) - Correct Answer-1. initial procedures 2. substantive analytical procedures 3. test of details (vouching/tracing) 4. tests of balances 5. tests of details of presentation/disclosure 3 assertions tested for PPE in test of balances: - Correct Answer-- existence (inspect assets) - valuation / allocation - rights/ obligations What should be disclosed in the notes for PPE? - Correct Answer-details of PPE depreciation methods & UL impairments and processes for determining What are the audit procedures for LT debt? pg. 7 professoraxe l