PRINCIPLES OF AUDITING & OTHER ASSURANC
PRINCIPLES OF AUDITING & OTHER ASSURANC
21st Edition
ISBN: 9781264007202
Author: WHITTINGTON
Publisher: MCG
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Chapter 13, Problem 25QRA

a.

To determine

Explain the given circumstances would CPAs learn of the transactions erroneously treated as revenue expenditures in years 1 and 2.

b.

To determine

Explain whether the balance sheet of year 3 would be affected by the recording error occurred in year 1 and year 2.

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Define working capital and explain its importance in financial health and liquiditymanagement.2. Assess how the matching concept and accrual basis affect the reporting ofcurrent assets and liabilities.3. Using a hypothetical balance sheet (you may create one), identify at least 5current assets and 5 current liabilities and analyze how changes in theseelements affect liquidity ratios.4. Recommend at least two strategies  to optimizeworking capital.
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Chapter 13 Solutions

PRINCIPLES OF AUDITING & OTHER ASSURANC

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