1)
To determine: The quality relevant to the given information.
Introduction:
2)
To determine: The quality relevant to the given information.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
3)
To determine: The quality relevant to the given information.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
4)
To determine: The quality relevant to the given information.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
5)
To determine: The quality relevant to the given information.
Introduction:
Accounting Information System (AIS) is said to be the specialized subsystem of the Information System (IS). AIS can be used in the business events for the purpose of collecting, processing, and reporting the financial information.
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Chapter 1 Solutions
ACCT. INFO. SYSTEMS W/ MINDTAP >BI<
- Lenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. In providing control over shipments, the client has prenumbered “warehouse removal slips” that are used for every sale. It is company policy never to remove goods from the warehouse without an authorized warehouse removal slip. After shipment, two copies of the warehouse removal slip are sent to billing for the computerized preparation of a sales invoice. One copy is stapled to the duplicate copy of a prenumbered sales invoice, and the other copy is filed numerically. In some cases, more than one warehouse removal slip is used for billing one sales invoice. The smallest warehouse removal slip number for the year is 11741 and the largest is 34687. The smallest sales invoice number is 45302 and the largest is 65747. In the audit of sales, one of the…arrow_forwardLenter Supply Company is a medium-sized distributor of wholesale hardware supplies in the central Ohio area. It has been a client of yours for several years and has instituted excellent internal controls for sales at your recommendation. In providing control over shipments, the client has prenumbered “warehouse removal slips” that are used for every sale. It is company policy never to remove goods from the warehouse without an authorized warehouse removal slip. After shipment, two copies of the warehouse removal slip are sent to billing for the computerized preparation of a sales invoice. One copy is stapled to the duplicate copy of a prenumbered sales invoice, and the other copy is filed numerically. In some cases, more than one warehouse removal slip is used for billing one sales invoice. The smallest warehouse removal slip number for the year is 11741 and the largest is 34687. The smallest sales invoice number is 45302 and the largest is 65747. In the audit of sales, one of the…arrow_forwardWhich of the following is NOT an independent verification control?a. The shipping department verifies that the goods sent from the warehouse are correct in type and quantity.b. General ledger clerks reconcile journal vouchers that were independently prepared in various departments.c. The use of prenumbered sales orders.d. The billing department reconciles the shipping notice with the sales invoice to ensure that customers are billed for only the quantities shipped.arrow_forward
- The accounting clerk for the RAM System Company receives source documents such as purchase orders, sales invoices, and vendor invoices, which she uses to prepare journal vouchers for general ledger entries. Each day the clerk posts the journal vouchers to the general ledger and the related subsidiary ledgers. Each month the clerk reconciles the subsidiary accounts to their control accounts in the general ledger to ensure that they balance. Discuss any control weaknesses and risks associated with this scenario.arrow_forwardWhich of the following test controls most likely would help assure an auditor that goods shipped are properly billed? A. Scan the sales journal for sequential and unusual entries. B. Examine shipping documents for matching sales invoice. C. Compare the accounts receivalbe ledger to daily sales summaries. D. inspect unused sales invoices for consecutive prenumbering.arrow_forwardThe following are audit procedures from different transaction cycles:1. Examine duplicate copy of shipping documents for evidence that quantities wereverified before shipment.2. Select a sample of payroll checks and agree hours to employee time records.3. Use audit software to foot and cross-foot the sales journal and trace the balance tothe general ledger.4. Examine voucher packages and related vendor invoices for evidence of approval ofaccount classification.5. Trace a sample of shipping documents to entry in the sales journal.6. Examine a sample of warehouse removal slips for signature of authorized official.7. Select a sample of entries in the cash receipts journal and trace to posting in individualcustomer accounts receivable records.8. Select a sample of sales invoices and agree prices to the approved price list.a. For each audit procedure, identify whether it is a test of control or a substantive testof transactions.b. For each audit procedure, identify the transaction-related…arrow_forward
- Trena selected 20 invoices to test the control that the sales clerk checks that the pricesagree with the authorised price list. She found three instances where the sales clerk had notsigned the ‘prices checked’ box on the invoice. The sales manager explained that the salesclerk always checks the prices, but sometimes forgets to sign the box. As the prices on all theinvoices agreed with the authorised price list, Trena concluded that the control was operatingsatisfactorily.Required:For each of the five scenarios presented above, indicate whether you believe that sufficientappropriate audit evidence was obtained to support the conclusions reached. Give reasons foryour decisionarrow_forwardPrecision Industries, Inc., is a manufacturer of electronic components. When a purchase order is received from a customer, a sales clerk prepares a serially numbered sales order and sends copies to the shipping and accounting departments. When the merchandise is shipped to the customer, the shipping department prepares a serially numbered shipping advice and sends a copy to the accounting department. Upon receipt of the appropriate documents, the accounting department records the sale in the accounting records. All shipments are FOB shipping point. How can the auditors determine whether Precision Industries, Inc., has made a proper year-end cutoff of sales transactions?arrow_forwardA furniture company ordered 84 tables from a supplier. The supplier accidentally sent only 48 tables, but the receiving department at the furniture company accepted the tables. The invoice was eventually received but was for the original 84 tables. The furniture companypaid the entire amount. Which of the following controls would have been least likely to have prevented this erroneous payment?a. The copy of the purchase order sent to the furniture company’s receiving department should not have shown an expected quantity.b. Personnel in the furniture company’s accounts payable department should compare the receiving report to the purchase invoice before creation of the voucher. c. Personnel in the furniture company’s cash disbursements department should compare the check that is prepared to all of the backup documentation.d. Personnel in the furniture company’s purchasing department should compare the purchase requisition with the purchase orderarrow_forward
- You are tasked to perform cut-off procedures for expenses and its related payable. In testing the completeness/cut-off assertion, what document would you most likely inspect? Group of answer choices A. Purchase journal 15 days before and 15 days after report date. B. Accounts payable subsidiary ledger. C. Cash disbursement journal 15 days before and 15 days after report date. D. Vendor invoice register 15 days before and 15 days after report date.arrow_forwardSample Selection. Hunter McNeal is studying and evaluating Branyon’s internal controlsrelated to the mathematical verification of sales invoices. In this verification, Branyon’s control activities require that employees perform the following procedures:∙ Verify that sales invoices are prepared only for items actually shipped to customers. Thisactivity is evidenced by requiring employees to place a checkmark next to quantities onthe sales invoices.∙ Verify that prices charged to customers are from approved price lists. This activityis evidenced by requiring employees to place a checkmark next to prices on the salesinvoice.∙ Verify that extensions and footings on invoices are mathematically accurate. This activityis evidenced by requiring employees to initial the bottom of the invoice in a sectionmarked “Mathematically verified by.”To verify the operating effectiveness of these activities, McNeal established an expectedpopulation deviation rate of 3 percent, a tolerable rate of deviation…arrow_forwardAn employee in the receiving department keyed in a shipment from a remote terminal and inadvertently omitted the purchase order number. The best systems control to detect this error would be aa. batch total.b. completeness test.c. sequence check.d. reasonableness test.e. compatibility test.arrow_forward
- Accounting Information SystemsFinanceISBN:9781337552127Author:Ulric J. Gelinas, Richard B. Dull, Patrick Wheeler, Mary Callahan HillPublisher:Cengage LearningPkg Acc Infor Systems MS VISIO CDFinanceISBN:9781133935940Author:Ulric J. GelinasPublisher:CENGAGE LAccounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College PubAuditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning