Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

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Question

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

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1 Of the total utilities, 80% relates to manufacturing and 20% relates to general and administrative costs. 2 Of the total insurance, 66% relates to the Factory Plant & Equipment & 33% relates to general & administrative costs. 3 The property taxes should be shared: 75% manufacturing & 25% general & administrative costs. Required: i) Calculate the raw material used in production by Unique School Supplies & Uniforms. ii) What is the total factory overhead costs incurred by Unique School Supplies & Uniforms during the period? iii) Determine the prime cost & conversion cost of the knapsacks manufactured. iv) Prepare a schedule of cost of goods manufactured for the year ended June 30, 2024, clearly showing total manufacturing cost & total manufacturing costs to account for. v) What is the selling price per knapsack if Unique School Supplies & Uniforms manufactured 925 knapsacks for the Debe High School and uses a mark-up of 25% on cost? vi) How does the format of the income statement for a…

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Answer 2

Question

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

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Answer 3

Question

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

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Answer 4

Question

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

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Answer 5

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

Answer 6

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

Answer 7

Chapter 16, Problem 1RQ

To determine

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Answer 8

Expert Solution & Answer

Explanation of Solution

Difference between test of details of balances, test of control and substantive tests of transactions for sales and collection cycle are as mentioned below:

Test of details of balances: are used to identify whether the statements of transaction are valid and correct or not. It is a method of collection of facts and figures that supports the statements. For example: An auditor can use prepaid income liabilities account by examining each of the prepaid income balance.
Test of control and substantive test of transaction for the sales and collection cycle: are focused upon verifying whether the internal control of the audit process are working or not and also to test the actuality of the transaction in the financial statements. For example: Inspection of a fixed asset

The test of control and substantive test of transaction results affects the size of the sample, method, timing and units selected for the test of details of balances, as effective internal control will reduce the testing.

Answer 9

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Answer 10

Expert Solution & Answer

Answer 11

Ch. 16 - Prob. 1RQ Ch. 16 - Prob. 2RQ Ch. 16 - Prob. 3RQ Ch. 16 - Prob. 4RQ Ch. 16 - Explain why you agree or disagree with the...Ch. 16 - Prob. 6RQ Ch. 16 - Prob. 7RQ Ch. 16 - Prob. 8RQ Ch. 16 - Prob. 9RQ Ch. 16 - Prob. 10RQ

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Differentiate between test of details of balances, tests of controls and substantive tests of transactions for the sales and collection cycle. Also, determine the effect of tests of controls and substantive test over test of details of balances.

Explanation of Solution

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