Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 8, Problem 22RQ
To determine
Set performance materiality for the three relevant accounts.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Give short answers to questions
Match each concept with the definition that best describes it.
Expense recognition principle (matching
[ Choose]
principle)
[ Choose ]
Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.
Accounting basis in which companies record revenue when they receive cash and an expense when they pay out cash.
The principle that companies recognize revenue in the accounting period in which the performance obligation is satisfied.
Information that accurately depicts what really happened.
The principle that companies recognize expense in the period in which they make efforts (consume assets or incur liabilities) to generate revenue.
An assumption that accountants can divide the economic life of a business into artificial time periods.
Monthly or quarterly accounting time periods.
An accounting period that extends from January 1 to December 31.
Revenue recognition principle
Time period assumption
Calendar year…
Please answer with reason for all why the option is correct and why the other options are incorrect................ 1. Accounting provides information on A. Cost and income for managers B. Company's tax liability for a particular year c. Financial conditions of an institutions D. All of the above.............. 2. The long term assets that have no physical existence but are rights that have value is known as A.Current assets B.Fixed assets C.Intangible assets D.Investments............. 3.The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as A.Current assets B.Fixed assets c.Intangible assets D.Investment
Chapter 8 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 15RQCh. 8 - Your client, Harper Company, has a contractual...Ch. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22RQCh. 8 - Prob. 23RQCh. 8 - Prob. 24RQCh. 8 - Prob. 25.1MCQCh. 8 - Prob. 25.2MCQCh. 8 - Prob. 25.3MCQCh. 8 - Prob. 26.1MCQCh. 8 - Prob. 26.2MCQCh. 8 - Prob. 26.3MCQCh. 8 - Which one of the following statements is correct...Ch. 8 - Prob. 27.2MCQCh. 8 - Prob. 27.3MCQCh. 8 - Prob. 28.1MCQCh. 8 - Prob. 28.2MCQCh. 8 - Prob. 28.3MCQCh. 8 - Prob. 29DQPCh. 8 - Prob. 30DQPCh. 8 - Prob. 31DQPCh. 8 - Your comparison of the gross margin percent for...Ch. 8 - Prob. 33DQPCh. 8 - Prob. 34DQPCh. 8 - Prob. 35DQPCh. 8 - Prob. 36DQPCh. 8 - Prob. 37DQPCh. 8 - Following are statements of earnings and financial...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The following is a statement showing the financial status of the comapany at any given time A. Trading account B. Profit & Loss statement C. Balance Sheet D. Cash Book Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwarda. What do the accounting policies say in the annual report (footnotes) regarding the cost of revenue? What are the drivers to the cost of revenue and the trends? b. Are there any trends in sales and marketing expenses or research and development? Are these amounts reasonable for the type of business? c. Compare general and administrative expenses to similar companies. Are they reasonable? d. What is the ratio of net interest income (expense) to income from operations? Is this a safe ratio for the company? Why or why not?arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Match (by letter) the following items with the description or example that best fits. Each letter is used only once.Terms_____ 1. Vertical analysis._____ 2. Horizontal analysis._____ 3. Liquidity._____ 4. Solvency._____ 5. Discontinued operations._____ 6. Quality of earnings._____ 7. Conservative accounting practices._____ 8. Aggressive accounting practices.Descriptionsa. A company’s ability to pay its current liabilities.b. Accounting choices that result in reporting lower income, lower assets, and higher liabilities.c. Accounting choices that result in reporting higher income, higher assets, and lower liabilities.d. The ability of reported earnings to reflect the company’s true earnings as well as the usefulness of reported earnings to help investors predict future earnings.e. A tool to analyze trends in financial statement data for a single company over time.f. The sale or disposal of a significant component of a company’s operations.g. A means to express each item in a financial…arrow_forwardMatch the following situations or statements with the correct assumption or principle. Financial Statements must be prepared at defined equal time intervals A company is assumed to continue its activity in order to fulfill objectives and commitments All important financial information must be reported or revealed. The value of an asset will be kept unchanged regardless of changes in the assets fair value. Expenses are recorded in the same period when they help generate revenues. Choose... Choose... Going concern assumption Periodicity assumption Expense recognition principle Historical cost principle Full disclosure principle Choose... Choose... =arrow_forwardI. Multiple Choice Directions: Choose the letter corresponding to the correct answer for each of the questions provided below. 1. Accounts receivable or the amount to be received when a customer orders on account is an example of what account? b. Liability d. All of the above a. Asset c. Equity 2. Expenses incurred on paying utilities belong to what type of account? b. Liability d. All of the above a. Asset c. Equity 3. If Company A borrows money from company B, the transaction results to a. İncrease in asset of A and increase in asset in B b. Increase in asset of A and decrease in equity of B c. Increase in asset of A and no effect on assets of B d. Both B and C 4. Equity means assets minus liabilities. Other terms that can be used synonymously Q2with equity are the following except a. Capital b. Net assets d. Profit c. Net worth 5. Sources of legal obligation are the following except a. The law c. Debts • Source: Ferrer R.C. et.al. (2017). Fundamentals of Accountancy, Business and…arrow_forward
- 5.) For each definition, list the “ratio category (or grouping)” that is described by filling in the blanks from (a) to (f) and provide one example for each category or grouping. a) Determines a company’s ability to pay off short term obligations or debts as they come due. ________________________ b) Relates company’s internal performance to the external judgment of the marketplace in terms of what it is worth. ________________________ c) Identifies percentage of earnings paid out to shareholders and what is reinvested for internal growth. ________________________ d) Speed at which company turns over its inventory, receivables and long-term assets. ________________________ e) How a company is financed between debt [lenders] and equity [owners]. ________________________ f) Measures return on sales, assets and total capital. ________________________arrow_forwardSolve the task. Describe the solution in detail. Construct a table. Draw a conclusion based on the result of the calculations. On the basis of the balance sheet of the company determine the turnover ratio of current assets and of accounts receivable. Consider the indicatorsarrow_forwardWhat I Know Directions: Choose the letter of the best answer and write your answer on a separate sheet of paper. 1. It pertains to resources which are controlled and owned by the business. a. Assets b. Liabilities c. Equity d. Resources 2. It is derived from deducting the total liabilities to the total assets of a company, a. Assets . b. Liabilities c. Equity d. Resources 3. Which of the following pertains to the obligations that the business owed to other entities arising from past events which are to be settled in the future? a. Assets b. Liabilities c. Equity d. Resources 4. Which of the following is the correct Accounting Equation? a. Assets + Liabilities Equity b. Assets = Liabilities Equity c. Assets Liabilities + Equity d. Assets + Equity = Liabilities 5. Which of the following is classified as Current Asset? a. Prepaid Expenses b. Land c. Delivery Vehicle d. Copyright 6. Which of the following financial statements presents the financial position of au entity at a given or…arrow_forward
- Lugi Ka Na Company has been forced into bankruptcy as of April 30 because of its inability to pay its debts. The statement of financial position on that date shows: ASSETS LIABILITIES & EQUITY Cash Accounts Receivable Note Receivable Inventory Prepaid Expenses Land and Building Equipment, net P5,400 78,700 37,000 175,700 1,900 122,500 97,600 Accounts Payable Notes Payable – PNB Notes Payable - suppliers Accruedwages Accruedtaxes P105,000 30,000 102,500 3,700 9,300 180,000 150,000 (61,700) P518,800 Mortgage Bonds Payable Common stock-P100 par Retained Earnings Total Liabilities & Equity Total Assets P518,800 Additional information: a. Accounts receivable of P32,220 and notes receivable of P25,000 are expected to be collectible. The good notes are pledged to PhilippineNational Bank. b. Inventories are expectedto bring in P90,200when soldunder bankruptcyconditions. Landand buildingshave an appraised value of P190,000. They serveas security on the bonds. d. The currentvalue of the…arrow_forwardWhich among the following options would help to improve the liquidity position of the business? a. Prompt payment of wages b. Reduction in the credit period allowed by the suppliers c. Prompt payment of day to day expenses d. Reduction in the credit period allowed to the customersarrow_forwardWhy is it expected that the initial debit and credit totals of the income statement accounts do not balance on a 10-column worksheet? Select one: a. None of the choices available. b. This is expected because the company should report an asset. c. This is not expected and it shows that there is definitely an error made. d. This is expected because the company should report an income or a loss.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License