EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
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Chapter 13, Problem 13.17MCQ
To determine
Concept Introduction:
Internal controls are policies and procedures defined by the management to ensure the smooth functioning of the business processes. Internal controls ensure the complete and correct accounting and safeguards to the assets.
To choose: the case of proper segregation of duties.
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Describe a walkthrough of a production transaction from receiving production orders to making an entry in the finished goods perpetual inventory records. What document copies would be collected?What controls noted? What duties separated?
Categorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem.a. preparing the weekly payroll for manufacturing personnelb. releasing raw materials for use in the manufacturing cyclec. recording the receipt of payment for goods soldd. recording the order placed by a customere. ordering raw materialsf. determining the amount of raw materials to order
Categorize each of the following activities into the expenditure, conversion, or revenue cycles, and identify the applicable subsystem and give examples of each subsystem . a. Preparing the weekly payroll for manufacturing personnel
b. Releasing raw materials for use in the manufacturing cycle
c. Recording the receipt of payment for goods sold
d. Recording the order placed by a customer
e. Ordering raw materials
f. Determining the amount of raw materials to order?
Chapter 13 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 13 - Prob. 13.1RQCh. 13 - Prob. 13.2RQCh. 13 - Prob. 13.3RQCh. 13 - Prob. 13.4RQCh. 13 - Prob. 13.5RQCh. 13 - Prob. 13.6RQCh. 13 - Prob. 13.7RQCh. 13 - Prob. 13.8RQCh. 13 - Prob. 13.9RQCh. 13 - Prob. 13.10RQ
Ch. 13 - Prob. 13.11RQCh. 13 - Prob. 13.12RQCh. 13 - Prob. 13.13RQCh. 13 - Prob. 13.14MCQCh. 13 - Prob. 13.15MCQCh. 13 - Prob. 13.16MCQCh. 13 - Prob. 13.17MCQCh. 13 - Prob. 13.18MCQCh. 13 - Prob. 13.19MCQCh. 13 - Prob. 13.20MCQCh. 13 - Prob. 13.21MCQCh. 13 - Prob. 13.22MCQCh. 13 - Prob. 13.23MCQCh. 13 - Prob. 13.24MCQCh. 13 - Prob. 13.25MCQCh. 13 - Prob. 13.26MCQCh. 13 - Prob. 13.27PCh. 13 - Prob. 13.28PCh. 13 - Prob. 13.29PCh. 13 - Prob. 13.30PCh. 13 - Prob. 13.31PCh. 13 - Prob. 13.32P
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- Tuscany Products, Inc. uses a job order cost system. The following accounts have been taken from the books of the company: Required: 1. Analyze the accounts and describe in narrative form what transactions took place. (Use the reference letters a. through f. in your explanations and note that some accounts needed in your explanation have been purposely omitted.) 2. List the supporting documents or forms required to record each transaction involving the receipt or issuance of materials. 3. Determine the ending balances for Materials, Work in Process, and Finished Goods.arrow_forwardHow do the job cost sheets act as a subsidiary ledger for the work in process inventory if journal entries are not made to the job cost sheets?arrow_forwardWhich document serve as a subsidiary ledger for the general ledger balance of work in process inventory? Group of answer choices labor time tickets material requisitions job cost sheets material stockcards all of the above answersarrow_forward
- If a product is made to customers’ orders or specifications or if products are made in separate identifiable “lots” or “batches”, the appropriate accounting system is: a. periodic b. process c. perpetual d. job orderarrow_forwardIn a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a a.arrow_forwardWhen raw materials are purchased, the cost is debited to an inventory account called ________. The materials account in the general ledger is a control account; a separate account for each type of material is kept in a(n) ________ ledger, called a materials or stores ledger. Materials are issued from the storeroom to production based on a form called the ________. Direct labor is debited to the ________ inventory account.arrow_forward
- During the accounting period, Work in Process Inventory will be debited for Sales Salaries Work sent to Completed Goods DirectLabor Costsarrow_forwardAn incomplete subsidiary ledger of materials inventory for May is as follows: See Attachment a. Complete the materials issuances and balances for the materials subsidiary ledger under FIFO.b. Determine the materials inventory balance at the end of May.c. Journalize the summary entry to transfer materials to work in process.d. Explain how the materials ledger might be used as an aid in maintaininginventory quantities on hand.arrow_forwardSYSTEM DOCUMENTATION-EXPENDITURE CYCLE (MANUAL PROCEDURES)The following describes the expenditure cycle manual procedures for a hypothetical company. The inventory control clerk examines the inventory records for items that must be replenished and prepares a two-part purchase requisition. Copy 1 of the requisition is sent to the purchasing department, and Copy 2 is filed. Upon receipt of the requisition, the purchasing clerk selects a supplier from the valid vendor file (reference file) and prepares a three-part purchase order. Copy 1 is sent to the supplier,Copy 2 is sent to the AP department where it is filed temporarily, and Copy 3 is filed in the purchasing department. A few days after the supplier ships the order, the goods arrive at the receiving department. They are inspected, and the receiving clerk prepares a three-part receiving report describing the number and quality of the items received. Copy 1 of the receiving report accompanies the goods to the stores, where they are…arrow_forward
- Maintaining internal control over labor costs is necessary for a cost accounting system to function effectively. What are the internal control procedures regarding the charge to the work in process account and the credit to the payroll account in the general ledger?arrow_forwardThe following is a description of the conversion cycle of Central Production Limited:The conversion cycle of the company is triggered by a report from the warehouse. When the quantity of an inventory item falls below a pre-set minimum level, the warehouse manager sends an onlineinventory status report to production department advising them to schedule a production batch run for the item.Upon receipt of the report, the production clerk assesses the digital bill of materials and the route sheet files for the item to be produced and adds the production details to the online production schedule.The system automatically adds a record to the open work order file and sends an online work order to the work centre supervisor’s computer and to the accounting clerk’s computer.The work centre supervisor receives the work order from his computer and print hard-copy move tickets and materials requisitions for each production process. Production employees take the materials requisitions to store…arrow_forwardShow how to prepare a journal entry to enter direct materials costs into the WIP Inventory account for the first department in a sequential production process. Show how to prepare the journal entry recording the transfer of goods from the first to the second department.arrow_forward
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