Statement 1: In the absence of any errors or reconciling item, or when transactions between the home office and the branch are properly recorded, it is expected that the reciprocal account, home office and branch accounts, are of the same amount. Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an expense by the office directing the transfers, because it represents management mistakes or inefficiencies. O False, False O True, False O True, True O False, True
Statement 1: In the absence of any errors or reconciling item, or when transactions between the home office and the branch are properly recorded, it is expected that the reciprocal account, home office and branch accounts, are of the same amount. Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an expense by the office directing the transfers, because it represents management mistakes or inefficiencies. O False, False O True, False O True, True O False, True
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle
Section: Chapter Questions
Problem 11CYBK
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Question
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![Statement 1: In the absence of any errors or reconciling item, or when transactions between
the home office and the branch are properly recorded, it is expected that the reciprocal
account, home office and branch accounts, are of the same amount.
Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an
expense by the office directing the transfers, because it represents management mistakes or
inefficiencies.
O False, False
O True, False
O True, True
False, True](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12de94d0-83b1-403f-aea5-4c92fa771029%2F444c678a-c94c-4d16-9863-85bc1875c2ba%2Fl6q4d8g_processed.png&w=3840&q=75)
Transcribed Image Text:Statement 1: In the absence of any errors or reconciling item, or when transactions between
the home office and the branch are properly recorded, it is expected that the reciprocal
account, home office and branch accounts, are of the same amount.
Statement 2: Excessive freight costs for interbranch transfers should be absorbed as an
expense by the office directing the transfers, because it represents management mistakes or
inefficiencies.
O False, False
O True, False
O True, True
False, True
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