Acct 4420 Chapter 11 new

Acct 4420 Chapter 11 new - Acct4420 Chapter11Auditof...

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Acct 4420 Chapter 11 Audit of  Acquisition Cycle and  Inventory
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Chapter 11  Audit of Acquisition Cycle and Inventory Chapter 11 page 2 The two major transaction classes in the cycle include: Purchase transactions Cash disbursement transactions An important cycle because: Transactions in this cycle affect many financial statement accounts Several of the accounts (such as inventory) may be individually material to the financial statements.
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Chapter 11 page 3 Cash Cash Collections Beginning Balance Payments Ending Balance Purchases Beginning Balance Used to COGS Ending Balance Inventory Inventory Accounts Payable Accounts Payable Purchases Ending Balance Beginning Balance Payments
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Inventory Chapter 11 page 4 Inherent risks with inventory: Complexity (Dollar value LIFO and LCM) Potential for theft Impact on COGS and Gross Profit Defined as items purchased or manufactured and held for resale  to customers in the company’s ordinary course of business.
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Acct 4420 Chapter 11 new - Acct4420 Chapter11Auditof...

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