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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Answer 1

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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Ansari Basketball Inc. had a player contract with Rodriguez that is recorded in its books at $3,500,000 on July 15, 2022. Delta Basketball Inc. had a player contract with Williams that is recorded in its books at $4,200,000 on July 15, 2022. On this date, Ansari traded Rodriguez to Delta for Williams and paid a cash difference of $800,000. The fair value of the Williams contract was $5,300,000 on the exchange date. The exchange had no commercial substance. After the exchange, the Williams contract should be recorded in Ansari's books at $ __? Answer

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

Expert Solution & Answer

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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