James Bach is a CPA student working on the confirmation working paper from one of his clients, Dunstan Electric Co. He has so farsummarized the results of his testing as shown:CustomerApplied DevicesBarry ManufacturingBrandt ElectronicsJed Ltd.Balance per GL117,383107,084401,50058,650BalanceConfirmed117,38392,084401.50053,000Customer responseSent cheque for $15,000 December 29Returned damaged goods December 30 for $5,650Given the above results, which of the following statements regarding the accounts receivable confirmations is true? (Several choicesmay be correct.)There is no need to perform any further work for Applied Devices.For Barry Manufacturing, the auditor can assume the $15,000 is an error and should adjust the general ledger.For Barry Manufacturing, this is a timing difference and the auditor should review the receipt of the cheque after year end.For Brandt Electronics, even though there is no difference between the general ledger balance and the confirmed amount,the auditor should perform further work to substantiate the confirmed amount.For Jed Ltd., there is no need for an adjustment to accounts receivable.O For Jed Ltd., an error has been identified, and the accounts receivable should be adjusted for $5,650.

Auditor has to check the accounts as well as the balances shown on there so that the room and space…

Answered: Given the above results, which of the…

Given the above results, which of the following statements regarding the accounts receivable confirmations is true? (Se may be correct.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.

Question

James Bach is a CPA student working on the confirmation working paper from one of his clients, Dunstan Electric Co. He has so far
summarized the results of his testing as shown:
Customer
Applied Devices
Barry Manufacturing
Brandt Electronics
Jed Ltd.
Balance per GL
117,383
107,084
401,500
58,650
Balance
Confirmed
117,383
92,084
401.500
53,000
Customer response
Sent cheque for $15,000 December 29
Returned damaged goods December 30 for $5,650
Given the above results, which of the following statements regarding the accounts receivable confirmations is true? (Several choices
may be correct.)
There is no need to perform any further work for Applied Devices.
For Barry Manufacturing, the auditor can assume the $15,000 is an error and should adjust the general ledger.
For Barry Manufacturing, this is a timing difference and the auditor should review the receipt of the cheque after year end.
For Brandt Electronics, even though there is no difference between the general ledger balance and the confirmed amount,
the auditor should perform further work to substantiate the confirmed amount.
For Jed Ltd., there is no need for an adjustment to accounts receivable.
O For Jed Ltd., an error has been identified, and the accounts receivable should be adjusted for $5,650.

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