Which of the following audit procedures is least likely to detect an unrecorded liability quizlet?

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Auditing 2 final practice

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ACCOUNTING

a. Calculate the debt ratio and the return on assets using the year-end information for each of the following six separate companies ($in thousands).$ $$ \begin{matrix} & \text{A} & \text{B} & \text{C} & \text{D} & \text{E}\\ \text{1} & \text{Case} & \text{Assets} & \text{Liabilities} & \text{Average Assets} & \text{Net Income}\\ \text{2} & \text{Company 1} & \text{\$ 90,500} & \text{\$11,765} & \text{\$100,000} & \text{\$20,000}\\ \text{3} & \text{Company 2} & \text{64,000} & \text{46,720} & \text{40,000} & \text{3,800}\\ \text{4} & \text{Company 3} & \text{32,500} & \text{26,650} & \text{50,000} & \text{650}\\ \text{5} & \text{Company 4} & \text{147,000} & \text{55,860} & \text{200,000} & \text{21,000}\\ \text{6} & \text{Company 5} & \text{92,000} & \text{31,280} & \text{40,000} & \text{7,520}\\ \text{7} & \text{Company 6} & \text{104,500} & \text{52,250} & \text{80,000} & \text{12,000}\\ \end{matrix} $$ $ b. Of the six companies, which business relies most heavily on creditor financing? c. Of the six companies, which business relies most heavily on equity financing? d. Which two companies indicate the greatest risk (based on the debt ratio)? e. Which two companies earn the highest return on assets? f. Which one company would investors likely prefer based on the risk-return relation?

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ACCOUNTING

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ACCOUNTING

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ACCOUNTING

Vineyard Test Laboratories does heat testing (HT) and stress testing (ST) on materials and operates at capacity. Under its current simple costing system, Vineyard aggregates all operating costs of $1,190,000 into a single overhead cost pool. Vineyard calculates a rate per test-hour of$17 ($1,190,000 ÷ 70,000 total test-hours). HT uses 40,000 test-hours, and ST uses 30,000 test-hours. Gary Celeste, Vineyard’s controller, believes that there is enough variation in test procedures and cost structures to establish separate costing and billing rates for HT and ST. The market for test services is becoming competitive. Without this information, any miscosting and mispricing of its services could cause Vineyard to lose business. Celeste divides Vineyard’s costs into four activity-cost categories. a, Direct-labor costs,$146.000. These costs can be directly traced to HT, $100.000, and ST,$46.000. b. Equipment-related costs (rent, maintenance, energy, and so on), $350.000. These costs are allocated to HT and ST on the basis of test-hours. c. Setup costs,$430.000. These costs are allocated to HT and ST on the basis of the number of setup- hours required. HT requires 13.600 setup-hours, and ST requires 3.600 setup-hours. d. Costs of designing tests, $264.000. These costs are allocated to HT and ST on the basis of the time required for designing the tests. HT requires 3.000 hours, and ST requires 1.400 hours. 1. Classify each activity cost as output unit-level, batch-level, product- or service-sustaining, or facility-sustaining. Explain each answer. 2. Calculate the cost per test-hour for HT and ST. Explain briefly the reasons why these numbers differ from the$17 per test-hour that Vineyard calculated using its simple costing system. 3. Explain the accuracy of the product costs calculated using the simple costing system and the ABC system. How might Vineyard's management use the cost hierarchy and ABC information to better manage its business?

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Which of the following procedures would least likely lead the auditor to detect unrecorded?

Which of the following audit procedures would be least likely to lead the auditors to find unrecorded fixed asset disposals? Review of repairs and maintenance expense.

Which of the following is the most efficient audit procedure for the detection of unrecorded liabilities at the statement of financial position date?

Which of the following is the most efficient audit procedure for the detection of unrecorded liabilities? Compare cash disbursements in the subsequent period with the accounts payable trial balance at year-end.

Which of the following audit procedures would be best for identifying unrecorded liabilities?

Correct answer is option c Explanation: Auditor most likely vouch a sample of cash disbursements recorded just year-end to receiving reports and vendors invoices as it can provide the evidence for unrecorded liabilities if occurred.

Which of the following is the best audit procedure for determining the existence of unrecorded liabilities quizlet?

Examining selected cash disbursements in the period subsequent to the year-end is the best audit procedure for determining the existence of unrecorded liabilities.

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