Listed below are six of the seven assertions about classes of transactions and events made in the purchasing process. For each, give an example of how an auditor could use one of the typical documents in the purchasing process to test the assertion.OccurrenceCompletenessAuthorizationAccuracyCutoffClassification
What will be an ideal response?
Occurrence - The receiving report provides evidence regarding the occurrence assertion. This document records the receipt of goods. The auditor can test vouchers for the presence of an authorized receiving report to ensure that goods were actually received.
Completeness - The auditor can use the entity's vouchers and vendor invoices to test for completeness. In this case, the auditor will start with these documents and trace them to the purchases journal. This will provide assurance that all purchased items have been recorded.
Authorization - One example of a document used to test authorization is the purchase requisition form. This form is used to request goods or services for an authorized individual. The auditor can check that all purchase requisitions have been properly approved by reviewing these documents for authorization. This can be an important step in testing controls.
Accuracy - To test accuracy, an auditor can recalculate the amounts listed on the vendor invoice. This will help ensure that the proper amounts were paid and recorded in the journals.
Cutoff - The dates on the receiving reports and the dates on the vouchers can be compared with the dates in the purchases journal to test that the purchase transactions were recorded in the proper period.
Classification - The purchases journal is used to test for proper classification through an auditor's review of the journal. The journal provides details about each of the transactions made and to which accounts the transactions were posted.
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NOT among the reasons that Wegmans Food Markets delivers above-average profit margins and has below-average employee turnover rates in comparison to its supermarket industry rivals is
A. multimillion dollar investments in the training and education of its employees. B. rewards and benefits substantially lower than supermarket industry averages in order to boost profit margins. C. a regular series of programs designed to "hear," capture, and implement employees' ideas. D. its recruitment and staffing policy of filling at least half of its open opportunities internally. E. company events such as "open-door" days, team huddles, focus groups, and two-way Q&As with senior management.
On September 30 of the current year, a company acquired and placed in service a machine at a cost of $700,000. It has been estimated that the machine has a service life of five years and a salvage value of $40,000. Using the double-declining-balance method of depreciation, complete the schedule below showing depreciation amounts for all six years (round answers to the nearest dollar). The company closes its books on December 31 of each year. YearDepreciation for the PeriodEnd of Period?Beginning ofPeriod BookValueDepreciationRateDepreciationExpenseAccumulatedDepreciationBookValue1?????2?????3?????4?????5?????6?????
What will be an ideal response?
Power is equal to
a.The value of the Type II error subtracted from 1 b.The value of the Type I error subtracted from 1 c.One subtracted from the value of the Type II error d.One subtracted from the value of the Type I error
Rose Corp. has contribution margin of $65,000, variable costs of $10 per unit, and fixed costs of $25,000. If Rose sells 13,000 units, what was the selling price per unit?
A. $5.00 B. $12.50 C. $17.08 D. $15.00