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LSU ACCT 3222 Chp 12 & 13 - Final Exam Questions and Solutions, Exams of Accounting

Louisiana State University (LSU) - ShreveportAccounting

A comprehensive set of questions and answers related to chapters 12 and 13 of lsu's acct 3222 course, covering topics such as auditing payables and liabilities, cash, ppe, lt debt, and se. It offers insights into key assertions, audit procedures, and specific examples relevant to the final exam.

Typology: Exams

2024/2025

Available from 03/27/2025

bryanryan
bryanryan 🇺🇸

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LSU ACCT 3222 Chp 12 & 13 - Final Exam
questions with complete solutions
What assertion is most important in auditing payables and
liabilities? correct answer: completeness
What assertion is tested when performing initial procedures for
A/P balances? correct answer: valuation
4 initial procedures for A/P correct answer: 1. agree BB to PY
2. obtain A/P TB
3. scan for unusual transactions
4. agree sub ledger to GL
In auditing which accounts are substantive procedures
optional? correct answer: payables/ liabilities
CASH (not meaningful bc of high fluctuation)
3 test of details of transactions of transactions for A/P correct
answer: 1. Vouch
2. Perform cutoff tests
3. Perform search for unrecorded liabilities
Which of the test of details of transactions for A/P is more
powerful in testing completeness? correct answer: Perform
search for unrecorded liabilities
pf3
pf4
pf5

Partial preview of the text

Download LSU ACCT 3222 Chp 12 & 13 - Final Exam Questions and Solutions and more Exams Accounting in PDF only on Docsity!

LSU ACCT 3222 Chp 12 & 13 - Final Exam

questions with complete solutions

What assertion is most important in auditing payables and liabilities? correct answer: completeness What assertion is tested when performing initial procedures for A/P balances? correct answer: valuation 4 initial procedures for A/P correct answer: 1. agree BB to PY

  1. obtain A/P TB
  2. scan for unusual transactions
  3. agree sub ledger to GL In auditing which accounts are substantive procedures optional? correct answer: payables/ liabilities CASH (not meaningful bc of high fluctuation) 3 test of details of transactions of transactions for A/P correct answer: 1. Vouch
  4. Perform cutoff tests
  5. Perform search for unrecorded liabilities Which of the test of details of transactions for A/P is more powerful in testing completeness? correct answer: Perform search for unrecorded liabilities

During cutoff testing for A/P, which transactions regarding shipment should the client record if they are the purchaser? What if they are the seller? correct answer: Purchaser: if FOB shipping point, anything shipped before or on YE if FOB destination, client should record anything received before or on YE Seller: if FOB shipping point, ownership transfers if shipped before/on YE if FOB destination, client still owns anything still in transit on YE 3 procedures done when performing the search for unrecorded liabilites during the test of details of transactions? correct answer: 1. inspect subsequent cash disbursements

  1. inspect recently recorded liabilities after YE
  2. inspect outstanding/unmatched receiving reports/PO at YE or early Jan What assertion does the test of details of balances test? correct answer: existence - not commonly done (completeness is most important) When should the test of details of balances to confirm A/P be performed? (2) correct answer: - if concerned abt overstatement of liabilities
  • if client has weak IC over A/P and purchasing

How should the client avoid kiting with bank transactions? correct answer: book dates should be the same for both accounts at the different banks to avoid a double count 2 procedures when testing the details of balances when auditing CASH? correct answer: - confirm cash balances

  • reperform client's YE bank rec & trace to cutoff bank statement Which assertions does confirming cash balances during test of details of balances test? correct answer: existence completeness valuation rights/obligations When should the auditor request the cutoff bank statement in test of details of balances for CASH? correct answer: after YE - January 4 accounts/items to look for when testing details of presentation and disclosure for cash? correct answer: 1. bond- sinking fund
  1. restrictions on cash balances
  2. lines of credit (debt)
  3. bank overdraft (report as current liab) What is a bond sinking fund? How should this be recorded? correct answer: when a company is setting cash aside to pay off a future bond

record as LT investment Why is cash a low risk account? correct answer: it is kept in a 3rd party (bank) lower volume of transaction but higher in value correct answer: PPE 6 activities what occur with PPE correct answer: 1. Acquisitions

  1. Depreciation
  2. Leasing
  3. Maintenance/Repairs Expenses
  4. Dispositions
  5. Impairments What are the audit procedures for PPE? (5) correct answer: 1. initial procedures
  6. substantive analytical procedures
  7. test of details (vouching/tracing)
  8. tests of balances
  9. tests of details of presentation/disclosure 3 assertions tested for PPE in test of balances: correct answer:
  • existence (inspect assets)
  • valuation / allocation
  • rights/ obligations