136,620 65,320 2 Cash Discount expense Closing balance (Balance c/d) $ 67,800 3,500 65,320 136,620 ACCT1501 Practice Exam Questions & Solutions 2015S2 QUESTION 2 (12 Marks) Financial Reporting Principles, Accounting Standards and Auditing, & Sustainability Reporting Provide short answers to the following: 1. Auditors are required to maintain independence from their audit client. Why such independence is crucial? Why achieving and maintaining independence is difficult
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facing a financial reporting problem in which the financial statements were overstated. Joe King ,the CEO of the company, was appointed in July of 2001, and was responsible for managing and inventory control, among other very important duties. Diane Bullock was hired in 2003, to replace the previous CFO. Both Bullock and King were being accused of what? by the external auditors, Deloitte & Touche, for not disclosing an 8 million pre-tax inventory valuation error. Financial reporting Problem The
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Processes ƒ FI Reporting ƒ Audit Trails SAP ERP Goal of Financial Accounting (FI) Financial Accounting is designed to collect the transactional data that provides a foundation for preparing the standard portfolio of reports. ƒ In general, these reports are primarily, but not exclusively, directed at external parties. Standard reports include: - Balance Sheet - Income Statement - Statement of Cash Flows SAP R/3 TYPICAL BUSINESS BLUEPRINT QTN VENDOR REQ FORECASTING PO CONTRACT GOODS RECEIPT
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then it would have in its normal business cycle Bausch & Lomb moved future sales into the current reporting period. In the short term Bausch & Lomb is exhibiting growth in sales revenue that is not really there. Operating Earnings derived from the Income statement is going to be greatly convoluted, and misunderstood by their decision to sell inventory earlier then it was needed. The cost of goods sold will be much higher then it normally would have under normal selling conditions, which could lead
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legally binding obligation that gives party the right to demand the performance of whatever promised * management (agency problem) – information asymmetry, act in self interest * debt Stewardship – compliance with delegated authority Agency Cost of equity Perquisite consumption – Manager give themselves more luxury than would seem reasonably from the principals point of view. E.g. corporate jets and huge officers with expensive art Risk aversion – managers and shareholders may prefer different
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Internal Control and Financial Reporting for Cash and Merchandise Sales ANSWERS TO EXERCISES E6–4 Req. 1 a. Document procedures b. Segregate duties / Document procedures c. Establish responsibility d. Independently verify e. Document procedures f. Independently verify Req. 2 | Steps | Documentation | Performed By | |1. Request that goods or services be |Purchase requisition
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created in a single day which was not typical. The performance analysis usually took several days after the end of each month. The plant accountant rushed through analysis and then took a day off. This wouldn’t be considered proper procedures for reporting a company’s financial information. Diversity will always be a challenge in accounting practices, but a firm should be held responsible for the financial reports they are preparing and they must present the information
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Travis, I enjoyed our lunch yesterday. It was good to catch up. I can’t believe it’s been five years since we last worked together! While it’s been a bit of a transition, I’m enjoying my work here at Tipstar Gaming. These guys are creative geniuses. Their goal is to be the industry leader in multi-player, online gaming, and they are really pushing the envelope. They are close to releasing a new game now that is just unbelievable. It's all very hush hush, but I've seen some early versions. Think World
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Equipment, Mining and Electrical Equipment, Material Handling Equipment and Harnischfeger Engineer, based in Milwaukee, Wisconsin. The main topic of this case is the accounting policy changes after financial difficulties and its effect on financial reporting and the motive of these changes. Questions 1. Identify all accounting policy changes and accounting estimates that Harnischfeger made during 1984. Estimate, as accurately as possible, the effect of these on the company’s 1984 reported profit
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CHAPTER 8 Valuation of Inventories: A Cost-Basis Approach ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics 1. Inventory accounts; determining quantities, costs, and items to be included in inventory; the inventory equation; balance sheet disclosure. Perpetual vs. periodic. Recording of discounts. Inventory errors. Flow assumptions. 10, 11 7 12, 13, 16, 18, 20 4 5, 6, 7 Questions 1, 2, 3, 4, 5, 6, 8, 9 Brief Exercises 1, 3 Exercises 1, 2, 3, 4, 5, 6, 10 Problems 1, 2, 3 Concepts for Analysis 1
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