Answered

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As part of your first audit of the financial statements of Marina del Rey, Inc., you have decided to confirm some of the accounts payable. You are now in the process of selecting the individual companies to whom you will send accounts payable confirmation requests. Among the accounts payable you are considering are the following: a. Which two of the above four accounts payable would you select as the most important to confirm? Explain your choice in terms of the audit objectives in sending accounts payable confirmation requests. b. Assume that you are selecting accounts receivable to be confirmed. Assume also that the four companies listed above are customers of your client rather than suppliers and that the dollar amounts are accounts receivable balances and total sales for the year. Which two companies would you select as the most important to confirm? Explain your choice

Sagot :

The choice of accounts payable for affirmation might be from the subsequent companies:

Large accounts inclusive of important suppliers despite the fact that the account stability is small at stability sheet date.

Money owed for which monthly statements are unavailable.

Accounts with uncommon transactions.

Money owed with zero balances that had widespread hobby in advance within the yr.

Based on the information i would check out the Dayco and Western supply debts. there has been some distance greater hobby with the ones two organizations as opposed to the others as a consequence leaving more room for blunders and fraud. With these in thoughts you would also advantage a better know-how of your consumer, its environment, and their internal controls. An auditor is likewise capable of assess the dangers of cloth misstatement because there's a bigger range of facts to be had

b) Debts receivable to be showed on a fine basis would be selected from the following groups:

Accounts with large balances to account for a main a part of the greenback fee of receivables

Money owed located with series businesses or debts with clients that are bankrupt, in receivership, or in other financial difficul­ties

Debts in dispute

Antique or inactive debts

A representative quantity of debts with small balances

Money owed that have been written off as uncollectible.

accounts with credit score balances

Primarily based on the information i would look at Western supply because the balance is important a part of accounts Receivable. Gearbox Inc. nearly 50% of debts Receivable is uncollected .Landon co. has nearly 87 % of income as money owed Receivable. So those 3 desires affirmation. I might also ask for affirmation of zero accounts Receivable of Dayco as it has significant activity inside the yr.

Accounts payable is the money a agency owes its vendors, even as money owed receivable is the cash that is owed to the business enterprise, commonly by using clients. when one organisation transacts with any other on credit, one will record an entry to money owed payable on their books while the opposite statistics an access to accounts receivable.

Learn more about accounts payable here : https://brainly.com/question/1347024

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