What is the difference between the auditor’s approach in verifyingsales returns and allowances and that for sales? Explain the reasons for the difference

Q: what is the basis of determining an allowance for doubtful accounts? O company's collection…

A: Allowance for Doubtful Accounts is a contra asset account. This account is a provision, which is…

Q: In the Off-Balance-Sheet Inventory Financing instance, how may auditors have identified the…

A: This question explains about the Off-Balance-Sheet Inventory Financing instance

Q: Which of the following is true? * O It is appropriate to measure the impairment of receivables based…

A:

Q: Which audit procedure is most effective in testing credit sales for overstatement?(1) Trace a sample…

A: Overstatement is the act of accounting a transaction higher than actually made. Overstated accounts…

Q: What is the process of confirming accounts receivable balances. Why is it important for auditors to…

A: The main objective of the auditor is to provide an opinion on the financial statement audited. The…

Q: Completeness

A: Correct answer :- B Completeness

Q: Which of the following is correct when a company uses the net price method of recording receivables?…

A: Under net method, the sales are initially recorded with the net amount after deducting the amount of…

Q: A typical substantive procedure for receivable balance and sales transactions may include…

A: Assertions: Assertions are used by the auditor to consider the different types of misstatements that…

Q: How many the specific audit tests for the Sales & Revenue Cycle?

A: Sales & Revenue Cycle: This cycle  is made up of  various classes of transactions with respect…

Q: Which of the following is most likely to be used in determining a proper amount to be included in…

A: Allowance for doubtful accounts is a kind of contra asset account. It is used to decrease the value…

Q: Why are the confirmation of payables is not a required audit procedure as it is with receivables?

A: The main objective of auditors is to conduct a thorough verification of the financial statements and…

Q: When merchandisers and manufacturers prepare income statements for their annual reports to…

A: Financial disclosure: Financial disclosure can be defined as a process of disclosing material…

Q: In the percentage of sales basis, companies examine their receivables by preparing an aging…

A: Uncollectible account is the estimated amount of account receivable is going to be bad debts. Such…

Q: scuss the process of auditing the following: • Revenue • Receivables • Expected Credit Lo

A: An audit, for example, is a type of on-site verification, similar to an inspection or examination,…

Q: you are auditing accounts receivable balances to confirm sales and found significant discrepancies…

A: Sales confirmations from customers means sending letters to customers requesting them to confirm the…

Q: How could auditors have discovered the off-balance-sheet financing described in the…

A: Off-balance sheet can be defined as procedures undertaken for inquiry and confirmation that can be…

Q: Why do auditors focus on revenue as a significant account and the occurrence of revenue as a…

A: Revenue cycle records all the transactions that originate from selling a product and lead to…

Q: Auditors sometimes use comparisons of ratios as audit evidence. An unexplained decreasein the ratio…

A:

Q: Discuss, using practical example the effect of prepayment figures on the preparation of a  financial…

A: Note: As per the policy we are supposed to solve one question at a time, Kindly repost the further…

Q: An audit team would most likely examine the detail support for charges to which of the following…

A: Audit Procedures:  A specific procedure undertaken by an auditor to procure evidence in a particular…

Q: Briefly explain the accounting treatment for sales returns and allowances. Where are these accounts…

A:

Q: Which of the following types of receivables would not deserve the special attention of the auditor?…

A: Audit is the process of checking and verifying the financial statements in business and to analyse…

Q: Which of the following is the least persuasive type of evidence? O purchase orders O bank…

A: Evidence is a proof which can be used for multiple purposes. Work which is highly risky becomes easy…

Q: Under the new revenue recognition standard, how is the sale of inventory recorded?

A: Revenue: It refers is the total amount of earnings generated from selling goods or rendering…

Q: Explain the relationship between the matching principle andthe need to estimate uncollectible…

A: The matching principle usually states that for every income there should be a corresponding expense…

Q: The following statements are correct except   a.Under the allowance method, estimated losses from…

A: Allowance method is the method for recording the estimation of uncollectible receivables. It kept…

Q: What is Target’s policy with respect to accounting for merchandise returns?

A: Financial Statements: Financial statements are a group or reports that present the financial…

Q: What is the net adjustment to Net Income as a result of the audit?

A:

Q: What is the audited net sales balance?

A: Net Sales Net sales is the difference between gross sales minus sales return and allowance.  Sales…

Q: Define and describe the differences between a sales return and a sales allowance

A: Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

Q: Which of the following substantive procedures would most likely help an auditor determine whether…

A: Substantive procedures are performed to detect the material misstatement or fraud at the assertion…

Q: Explain the role of sales volume, cost, and profitability in an audit? How do sales volume, cost,…

A: Sales Volume Audit analysis means a study of the net sales section of the profit and loss statement.…

Q: Which of the following items in the balance sheet does NOT have a constant relationship with sales…

A: In the percentage of sales method, we forecast line items for the future by using the historical %…

Q: Where would an auditor find the proper authorization that indicates it is okay to pay a vendor?

A: Auditor: Auditors are defined as officials appointed by an organization to monitor and analyze the…

Q: obtain evidence

A: Correct answer :- True.

Q: Which method, the percentage-of-receivables method or the percentage-of-credit-sales method, is…

A:

Q: What can be the effect of inventory errors on the financial reports? How can these errors be…

A: Inventory is the detailed list of items that are present on hand. It constitute of all the finished…

Q: discuss the process of auditing the following: • Revenue • Receivables • Expected Credit Loss (

A: As an example, an audit is a type of on-site verification, like an inspection or examination, of a…

Q: What are your takeaways from the audit of receivables?

A: Answer: Receivables are assets of financials that are to be received from debtors. Takeaways from…

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.