Question

As auditor of the Star Manufacturing Company, you have obtained a trial balance taken from the books of Star one month before year-end: Requirement Which accounts should be confirmed with outside sources? Briefly describe from whom they should be confirmed and the information that should be confirmed EB (Click the icon to view the trial balance.) There are no inventories consigned either in or out. All notes receivable are due from outsiders and held by Star. (To identily the information to be confirmed, solect the best choice from the list of A-N below. Assume significant individual transactions occurred in each sales and expense category.) (Click the icon to view the choice for "information to be confimed") From Whom Information to Be Account Name Confirmed Confirmed I0 In Choose from any drop-down list and then continue to the next question.

Answer 1

Star manufacturing Company From whom Confirmed Cashier or person responsible for making Cash transaction entry Information to be Confirmed The following information included in cash account should be confirmed: 1.Bank details like name and account 2.Amount deposited in bank account 3.Year end balance 4.Account name 5.Credits, debits and interest rates Account Name Cash in Bank Trade Accounts Receivable To confirm the trade account receivable confirmed by verifying a sample account Confirmation information includes: 1.Debtor information 2.Debtor account number 3.Confirmation for specific date 4.Invoice balance with date Notes Receivable Selecting a sample to verify the Information includes: balance. Writeoffs confirmed with sample accounts 1.Debtor details 2.Interest rates .Maturity dates 4.Year end balance 5.Interest enst date Inventory account confirmed by stock counting Information includes: 1.Transactions in warehouse where inventory is stored 2.Inventory balance at specific date 3.List of Invento Inventories Trade Accounts Payable Confirmation of balance from Information includes: 1.Supplier details 2.Purchase details at balance sheet date 3.Any other changes suppliers. Mortgages Payable Balance confirmed by Mortgagee Information includes: 1Year end balance 2.Mortgage loan type 3.Interest rates 4.Type of Mortgage Capital Stock Capital stock records confirmed by agents and registrar Information includes: 1.Number of shares 2.Issued shares 3.Authorized shares 4.Any Calls on shares Legal Fees Legal fees account confirmed with Information includes: legal professional or attorney letter 1.Specific legal charges 2.Type of fees .Opinion of attorney 4.arrangements in attorney letter Sales and Expenses Confirmation by external parties Information includes: 1.Sales Invoice 2.Transaction in sales journal and ledger 3.Sales taxes paid