collectability of the accounts receivables was problematic. It seemed as if Fly-by-Night had a good system of collecting their sales on account from year 9 to year 10 as the accounts receivable number decreased during those years. However‚ the accounts receivable account increased by more than six times through years ten and fourteen. Because of this poor system of collecting accounts receivable‚ Fly-by-Night’s cash flow would suffer. The same can be said about the inventory account. Because the amount
Premium Accounts receivable Balance sheet Generally Accepted Accounting Principles
you are responsible for developing an audit program for a manufacturing client that sells to over 1‚400 customers. You want to ensure your audit program addresses all relevant assertions for sales and accounts receivable. Address the following question in the context of the audit sales and receivables for this manufacturing client. Required a. What is the purpose of an audit program? The purpose of an audit program is to document decisions about the audit procedures that the auditor believes are
Premium Audit Accounts receivable Auditing
1‚500 Inventory December 31‚ 2007 (adjusted) $237‚392 (b) Transaction 3 Sales 12‚800 Accounts Receivable 12‚800 (To reverse sale entry in 2007) Transaction 4 Purchases (Inventory) 15‚630 Accounts Payable 15‚630 (To record purchase of merchandise in 2007) Transaction 8 Sales Returns and Allowances 2‚600 Accounts Receivable 2‚600 EXERCISE 8-14 (20–25 minutes) (a) (1) LIFO 600 @ $6.00 = $3‚600 100 @ $6.08 =
Premium Inventory Accounts receivable FIFO and LIFO accounting
c. Purchased equipment on account. Equipment XXX Accounts Payable XXX d. Purchased equipment for cash. Equipment XXX Cash XXX e. Purchased supplies on account. Supplies XXX Accounts Payable XXX f. Purchased supplies for cash. Supplies XXX Cash XXX g. Rendered services on account. Accounts receivable XXX Service Income XXX h. Rendered services for cash. Cash XXX Service Income XXX i. Billed the Customer for service rendered. Accounts receivable XXX Service Income XXX
Premium Accounts receivable Generally Accepted Accounting Principles Accounts payable
Q1: The primary objectives that auditors hope to accomplish by confirming a client’s year-end accounts receivable is to check certain management assertions such as existence‚ rights and obligations‚ and valuation. Confirmations from clients and outside parties related to a transaction. Generally‚ the auditor sends to the client’s customer a confirmation stating the amount owed. The customers are requested to return a statement to the auditor indicating whether they agree with the amount‚ or providing
Premium Auditing Accounts receivable Audit
Christine Ewing‚ Capital | | 44‚000 | | | | | | | 2 | No entry—not a transaction. | | | | | | | | | 3 | Supplies | 700 | | | | Accounts Payable | | 700 | | | | | | | 7 | Rent Expense | 600 | | | | Cash | | 600 | | | | | | | 11 | Accounts Receivable | 1‚100 | | | | Service Revenue | | 1‚100 | | | | | | | 12 | Cash | 3‚200 | | | | Unearned Service Revenue | | 3‚200 | | | |
Premium Generally Accepted Accounting Principles Balance sheet Accounts receivable
Classmates‚ According to (Oster‚ 2014)‚ "Percentage of receivables and percentage of sales are two accounting allowance methods used to reconcile customer accounts deemed noncollectable. When allowed by generally accepted accounting principles (GAAP)‚ these two strategies are preferred over direct write-off of bad debt expenses. Percentage of receivables and percentage of sales provide a business with the ability to accurately estimate the expected bad debt losses they will have in each succeeding
Premium Generally Accepted Accounting Principles Accounts receivable Revenue
inventory/sales which is higher than the industry average this could mean that they are holding onto inventory too long. Their payables are higher than the industry average which suggests that they are carrying a high amount of debt. The receivables are also higher than the industry average which could mean the period between getting paid for their services and the time they provided them are too far apart or they are not getting paid at all. The operating costs are also high so
Premium Finance Balance sheet Dividend
Supplies 124 2‚400 Accounts Payable 201 14‚400 Purchased equip. & supplies on credit. 6 Cash 101 2‚000 Services Revenue 403 2‚000 Received cash for services. 9 Accounts Receivable 106 8‚000 Services Revenue 403 8‚000 Billed client for completed work. 13 Accounts Payable 201 14‚400 Cash 101 14‚400 Paid balance due on account. 19 Prepaid Insurance 128 6‚000 Cash 101 6‚000 Paid premium for insurance. 22 Cash 101 6‚400 Accounts Receivable 106 6‚400 Collected
Premium Accounts receivable Balance sheet
Discussion Questions 1. Discuss some of the challenges facing business today. Does information technology play a role in these challenges? Explain. The business world and society in general are undergoing phenomenal and sometimes turbulent change. The “new economy” driven by the Internet has seen the rise of entirely new businesses like Amazon.com‚ Yahoo‚ eBay‚ and of course Google. While the “dot com bust” of 2000 saw the demise of thousands of Internet-oriented businesses‚ the fact remains that
Premium Balance sheet Economics Accounting software