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You are involved with the audit of Jelco Company for year 1 and have been asked to consider the confirmation reply results indicated below. For each confirmation reply, select the proper action to be taken from the following possible actions: (Each of the "Action" items may be used once, more than once, or not at all.) (1)Exception; propose an adjustment. (2)Send a second confirmation request to the customer. (3) Examine shipping documents and/or subsequent cash receipts. (4)Verify whether the additional invoices noted on the confirmation reply pertain to the year under audit or the subsequent year. (5) Not an exception; no further audit work is necessary. Proper Action Customer Reply (and any audit action already taken) a. "We mailed the check for this on December 31." |"We returned those goods on December 2." You have been able to determine that the goods were received by the client |on December 29, but not recorded until January 2. c. "We also owe for two more invoices for purchases we made around year-end; I'm not sure of the exact date." d. "We are very satisfied with Jelco and plan to purchase from them in the future." "While that's what we owe, we didn't owe it on December 31 because we didn't receive the goods until January 2 of year 2." f. You received no reply to a negative confirmation request to Adams Co. You received no reply to a positive confirmation request to Blake Co. Subsequently you recalled that Blake Co. has a policy of not responding to confirmations–in writing or orally. b. е. ai

You are involved with the audit of Jelco Company for year 1 and have been asked to consider the confirmation reply results indicated below. For each confirmation reply, select the proper action to be taken from the following possible actions: (Each of the "Action" items may be used once, more than once, or not at all.) (1)Exception; propose an adjustment. (2)Send a second confirmation request to the customer. (3) Examine shipping documents and/or subsequent cash receipts. (4)Verify whether the additional invoices noted on the confirmation reply pertain to the year under audit or the subsequent year. (5) Not an exception; no further audit work is necessary. Proper Action Customer Reply (and any audit action already taken) a. "We mailed the check for this on December 31." |"We returned those goods on December 2." You have been able to determine that the goods were received by the client |on December 29, but not recorded until January 2. c. "We also owe for two more invoices for purchases we made around year-end; I'm not sure of the exact date." d. "We are very satisfied with Jelco and plan to purchase from them in the future." "While that's what we owe, we didn't owe it on December 31 because we didn't receive the goods until January 2 of year 2." f. You received no reply to a negative confirmation request to Adams Co. You received no reply to a positive confirmation request to Blake Co. Subsequently you recalled that Blake Co. has a policy of not responding to confirmations–in writing or orally. b. е. ai

FINANCIAL ACCOUNTING
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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You are involved with the audit of Jelco Company for year 1 and have been asked to consider the confirmation reply results indicated below. For each confirmation reply, select the proper action to be taken from the following possible actions: (Each of the "Action" items may be used once, more than once, or not at all.) (1)Exception; propose an adjustment. (2)Send a second confirmation request to the customer. (3) Examine shipping documents and/or subsequent cash receipts. (4)Verify whether the additional invoices noted on the confirmation reply pertain to the year under audit or the subsequent year. (5) Not an exception; no further audit work is necessary. Proper Action Customer Reply (and any audit action already taken) a. "We mailed the check for this on December 31." "We returned those goods on December 2." You have been able to determine that the goods were received by the client on December 29, but not recorded until January 2. c. "We also owe for two more invoices for purchases we made around year-end; I'm not sure of the exact date." d. "We are very satisfied with Jelco and plan to purchase from them in the future." "While that's what we owe, we didn't owe it on December 31 because we didn't receive the goods until January 2 of year e. 2." f. You received no reply to a negative confirmation request to Adams Co. You received no reply to a positive confirmation request to Blake Co. Subsequently you recalled that Blake Co. has a g. policy of not responding to confirmations-in writing or orally.
Transcribed Image Text:You are involved with the audit of Jelco Company for year 1 and have been asked to consider the confirmation reply results indicated below. For each confirmation reply, select the proper action to be taken from the following possible actions: (Each of the "Action" items may be used once, more than once, or not at all.) (1)Exception; propose an adjustment. (2)Send a second confirmation request to the customer. (3) Examine shipping documents and/or subsequent cash receipts. (4)Verify whether the additional invoices noted on the confirmation reply pertain to the year under audit or the subsequent year. (5) Not an exception; no further audit work is necessary. Proper Action Customer Reply (and any audit action already taken) a. "We mailed the check for this on December 31." "We returned those goods on December 2." You have been able to determine that the goods were received by the client on December 29, but not recorded until January 2. c. "We also owe for two more invoices for purchases we made around year-end; I'm not sure of the exact date." d. "We are very satisfied with Jelco and plan to purchase from them in the future." "While that's what we owe, we didn't owe it on December 31 because we didn't receive the goods until January 2 of year e. 2." f. You received no reply to a negative confirmation request to Adams Co. You received no reply to a positive confirmation request to Blake Co. Subsequently you recalled that Blake Co. has a g. policy of not responding to confirmations-in writing or orally.
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