An audit of an entity records for its first year of operations determined that the following errors were made at the balance sheet date. Failed to accrue 50000 interest expenses failed to record depreciation expense on office equipment of 80000 failed to amortize prepaid rent expense of 100000 failed to defer recognition of prepaid advertising expense  of 60000. The net effect of these errors was to overstate net profit by A. 130000 B. 170000 C. 230000 D. 290000

Q: Based on the following audited financial statements of Fast Truckers at the end of December 31,…

A: Net income is calculated as gross receipts less total expense

Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: The answer for the above practical question on consistency in applying policies and procedures for…

Q: Fictitious accounting entries are recorded that cause revenue to be overstated by $5 millionfor the…

A: Fraud: Fraud means false representation. which was done intentionally.

Q: The following were discovered during your audit of Black Company’s financial statements for the year…

A: Journal Entry The purpose of preparing the journal entry to enter the required transaction into debt…

Q: A company Hira Ltd. has been mis-reporting its financial statements since more than 10 years which…

A: Auditors are those person who perform the audit of the financial statements of the company in order…

Q: 1. A firm, using the allowance method of recording credit losses, wrote off a customer's account in…

A: Allowance method is referring to record expected bad debts that can be generated from credit revenue…

Q: You were engaged as an independent auditor of Thomas Corporation . In the course of your examination…

A: A prior period adjustment is the correction of an accounting error that occurred in the past and was…

Q: The errors below were noted after the books of CalMart Corporation were audited at the close of 2021…

A: The overstatement of account is the excess record of that which the amount has to be recorded. Vice…

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A: Inventories of $9750 have been sold in 2019 but included in closing inventories that means closing…

Q: For three years Chona's Merchandise failed to recognize accruals, prepayments and other transactions…

A: Adjusted amounts are the one which are required to be added or subtracted in the financial…

Q: (Error Analysis) Lowell Corporation has used the accrual basis of accounting for several years. A…

A: Net income:   Net income is the total income of the company calculated after deducting its expenses…

Q: Do you consider that the change of accounting policies that have been used for a long time is an…

A: The answer for the practical question on consistency in applying policies and procedures for…

Q: identify whether it is treated as a prior period adjustment or change in accounting estimate. Upon…

A: Definition: Errors not affecting trial balance: An error is a mistake committed in the process of…

Q: (Analysis of Three Accounting Changes and Errors) The following are three independent, unrelated…

A: Situation 1: (a) Changing to the correct principle from the wrong accounting principle is a change…

Q: o settle the outstanding amounts. a. Faithful Representation; completeness; Enhancing b. Faithful…

A: The information is useful when it is of high quality and it provide information that is needed to…

Q: Aaron Rivers, CPA, is auditing the financial statements of Charger Company, a client for the past…

A: Materiality in Audit: Materiality is an idea or show inside review and bookkeeping connected with…

Q: A company forgot to record accrued and unpaid wages of $500,000 at the end of period. What world be…

A: Outstanding expenses are the expenses which are incurred but not paid yet. Such expenses are treated…

Q: PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent…

A:

Q: As a result of analytical procedures, the auditor determines that the gross profitpercentage has…

A: Option 4 is correct.

Q: For each of the following situations, indicate whether you agree or disagree with the financial…

A: While recording the transactions in the books of accounts or preparing the accounts there are some…

Q: (Error Analysis and Correcting Entry) You have been engaged to review the financial statements of…

A: Journal entry:   Journal entry is a set of economic events which can be measured in monetary terms.…

Q: least likely to be your starting point in computing materiality

A: First option is wrong because normalized net income is one of the three benchmarks for computing…

Q: In the audit of Beatles Company, the auditor had an appreciation of the following schedule and noted…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: The bookkeeper of Cooper Ltd. calculated the amount payable to SARS to be R112 539 The internal…

A: VAT stands for a Value Added Tax . It is collected on the product. VAT is included in the every…

Q: Classify each of the following accounting practices as conservative or aggressive. 1. Increase the…

A:

Q: You were engaged by Lanao Company to audit its financial statements for the first time. In examining…

A: Financial statements consists of the following:- Statement of Financial position; Income Statement;…

Q: If a company produced a net income of P28,000.00 but failed to adjust for P1,500 in depreciation of…

A: Net income of the business will be calculated by deducting all the expenses from the total income or…

Q: Which of the following situations has the best chance of being detected when a CPAcompares 2013…

A: Answer:   Option 4

Q: Suppose an auditor has been paid $1,000,000 each year for the past several years by a company to…

A: Given: Amount of audit for each year = $ 1,000,000 Amount of audit for the current year = $…

Q: The records of Davis Corporation have never been audited. The company is negotiating a large loan…

A: Correcting entries: 1. Opening inventory A/C Dr.                                     10,000…

Q: Milan Company reported pretax income of P 6,500,000 on December 31, 2021. During your audit, the…

A: Solution Pretax income  is a company's income after all operating expenses have bee deducted from…

Q: 8-9 You were engaged by DIANE Company to audit its financial statements for the first time. In…

A: SOLUTION-   NET INCOME   ALSO CALLED NET EARNINGS IS SALES - COGS , GENERAL EXPENSES  , TAXES AND…

Q: The errors below were noted after the books of CalMart Corporation were audited at the close of 2021…

A: We will analyse each transaction's effect on income, assets, liabilities, retained…

Q: Audit Report Deficiencies: Accounting Change and Uncertainty. The following auditors’ report was…

A:

Q: Megan Company (not a corporation) was careless about its financial records during its first year of…

A: The effect of each individual business transaction is analyzed on three elements as assets,…

Q: conceptual framework of accounting

A: Conceptual framework is developed by FASB to act as a fundamental check to develop accounting…

Q: Adjusting and Correcting Entries Upon inspecting the books and records for Wernli Company for the…

A: Adjusting entries are journal entries that are to be recorded at the end of an accounting period to…

Q: The CPA firm auditing Mason Street Recording Studiosfound that total stockholders’ equity was…

A:

Q: You have been the auditor of Data Ltd for two years. Your auditor’s report for Data for the year…

A: An auditor is appointed by a company to check the accuracy of the financial statements prepared by…

Q: The following are independent events. For each change or error select how it would be accounted for.…

A: ‘’Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: During your examination of the accounting books of South Sky Company for the year ended December 31,…

A: 2021 Particulars    Reported net profit  1750000 Less: unpaid salaries  (100000)  Less:…

Q: A CPA is performing review services for a small, closely held manufacturing company.As a part of the…

A: Auditing: Auditing is an independent examination of financial statements. The set of financial…

Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: Accounting standards are the rules or policies, required to be followed by public companies in…

Q: A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This…

A:

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.