Question

In this mini-case you will focus on performing one aspect of the test of details on the accounts payable balance – the search for unrecorded liabilities. To identify possible unrecorded liabilities you will compare the ipayments made after year end with the accounts payable listing as of the end of the year. In performing this comparison particular attention should be given to any payment made on the disbursements journal for which there was not an accounts payable balance as of year end. Your responsibility is to identify the transactions on the cash disbursements journal that the audit team should investigate and review further to determine if a liability should have been recorded as of year end. INSTRUCTIONS: Work paper 11-2 contains a listing of the cash disbursement journal entries made in the first few days of the following year end. Compare the transactions on the cash disbursements journal with the accounts payable listing on work paper 11-1. Use the appropriate tick mark to evidence your review of each transaction. Fields you are to complete are colored yellow. The color will disappear as the field is completed. When you are finished reviewing the transactions on work paper 11-2, enter your initials in the yellow box with title "Initial Here." On the worksheet labeled "Evaluation", provide the reason why you identified each transaction for additional investigation and review by the audit team. Please print a hard copy of the Evaluation worksheet and Work Paper 11-2 to submit in class unless otherwise indicated by your instructor. The work papers are formatted to fit on one page.

Answer 1

PTTTTTOIVOTETT EarthWear Cash Disbursements Journal SAAT 1/12/20 CASH DISBURSEMENTS JOURNAL from 1/1/2015 through 1/11/2015 ion Reasons for transactions identified for further inquiry and review Vendor payment on cash disbursements does not tie to balance on accounts payable listing -2561-1818 --2561-1821 --2561-1822 upply --2561-1823 ing --2561-1825 Payee Apparel Concepts American Apparel Texwin Pacific Ltd. Lewis Hardware MS Leather Factory Stephenson Promotion C&S Manufacturing Inc. Intermountain Gas G/L Account# 12087-25201-5608971-113 11023-25201-1435149-881 15237-56213-8146523-300 33000-91200-1253000-100 11023-25750-4152610-108 55126-11592-1001220-100 11023-25201-4441563-656 99000-61000-1642000-100 Vendor payment on cash disbursements journal does not appear on accounts payable listing Cash 254,032 25,407 105,021 20,536 40,501 157,206 134,043 37,554 $494,861 A Vendor payment on cash disbursements journal exceeds balance on accounts payable listing A Vendor payment on cash disbursements journal does not appear on accounts payable listing s to Date FS