Acc 422 Case Study

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ACCT 422 Homework 6 Solutions ACCT 422 Homework 6 Solutions 1. You are auditing general cash for a company for the fiscal year ended September 30, 2014. The client has not prepared the September 30 bank reconciliation,. After a brief discussion with the owner, you agree to prepare the reconciliation with the assistance from one the company’s clerks. You obtain the following information: (30 points) | General Ledger | Bank Statement | Beginning balance 9/1/14 | $15,000 | $17,800 | Deposits | | $31,051 | Cash receipts journal | $33,330 | | Check cleared | | (30,309) | Cash disbursements journal | ($27,101) | | September bank service charge | | (150) |…show more content…
The bank charged the company account for nonsufficient check totaling $950. The credit manager concluded that customer intentionally closed its account and the owner left the city. The check was turned over to collection agency. 7. A note for $7,500, plus interest was paid directly to the bank under an agreement singed five month ago. The note payable was recorded at $ 7,500 on the company’s books. Required: 1. Prepared a bank reconciliation that shows both the unadjusted and adjusted balance per books. 2. Prepare all adjusting entries 3. Below are 3 audit procedures commonly performed during an audit: (20 points) 1. Read the client’s physical inventory instruction and observe whether they are being followed by those responsible for counting the inventory. 2. Compare the client’s count of physical inventory at an interim date with the perpetual inventory master file. 3. Account for a sequence of raw material requisitions and examine each requisition for an authorized approval. Required: 1. For each procedure, identify which of the following is it: 2. Test of control 3. Substantive test of transactions. 4. For those procedures, identify, what transaction-related audit objective or objectives are being

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