Misstatements & Concepts a. The client failed to include in their financial statements inventory that was consigned to others. b. The client had a significant amount of damaged goods that were presented at cost. C. The client failed to describe in the financial statements significant debt restrictions. d. The client recorded receivables that were fictitious. e. The client recorded year-end sales in the subsequent year. f. The client included in their financial statements inventory that was on consignment from vendor. g. In directional testing, vouching from ledgers to source documents most directly addresses this assertion. h. In directional testing, tracing from source documents to journals most directly addresses this assertion. i. The assertion most directly related to the "did it all get included." j. The assertion most directly related to the question of ownership of an asset. Assertions

Misstatements & Concepts a. The client failed to include in their financial statements inventory that was consigned to others. b. The client had a significant amount of damaged goods that were presented at cost. C. The client failed to describe in the financial statements significant debt restrictions. d. The client recorded receivables that were fictitious. e. The client recorded year-end sales in the subsequent year. f. The client included in their financial statements inventory that was on consignment from vendor. g. In directional testing, vouching from ledgers to source documents most directly addresses this assertion. h. In directional testing, tracing from source documents to journals most directly addresses this assertion. i. The assertion most directly related to the "did it all get included." j. The assertion most directly related to the question of ownership of an asset. Assertions

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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When a large account receivable balance is due from one client it is logical to use the direct write-off method to adjust the bad debt expense and accounts receivable balance. Under different circumstances, another method is used called the allowance method. Discuss the best reason(s) for using the allowance method and give some examples of companies that are likely to use that method. Also explain why it would ever be appropriate to use the direct write-off method, especially since it is not GAA
The accountant for Kerns company mistakenly posted an expense amount as an asset in the general ledger. What is the financial statement impact of this error?
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