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Unformatted text preview: 18-21QUESTIONa.TYPE OF TESTb.PURPOSE OF PROCEDURE1Both (test of authorization is a test of control)To determine that the amount recorded in the acquisitions journal is correct (accuracy).To determine that recorded purchases are for goods and services actually received (occurrence).2Test of controlTo determine that the vendors’ invoices are approved for payment, and that receiving reports and purchase orders are all attached (occurrence).3Substantive test of transactionsTo determine that postings to the cash disbursements journal are properly summarized and posted to the general ledger and are posted to the accounts payable master file (posting and summarization).4Test of controlTo determine that all check numbers are included to the cash disbursements journal, no check number is included more than once and voided checks are accounted for (completeness and occurrence).5Substantive test of transactionsTo determine that the proper amount of cash disbursements are recorded during the test month. Checks are not recorded more than once and checks are not omitted (accuracy, occurrence and completeness).6Both (accounting for sequence is a test of control)To determine that all receiving reports were eventually entered into the system as liabilities (completeness).To determine that acquisitions were recorded at the proper amounts, considering the goods received (accuracy).7Substantive test of transactionsTo determine that the amount recorded is accurate, that the classification is proper, and that the acquisition is for goods and services received, consistent with the best interests of the company (accuracy, classification and occurrence)....
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This note was uploaded on 02/19/2011 for the course ACCT 509 taught by Professor Co during the Spring '11 term at Winthrop.
- Spring '11