Connect Accounting Chapter 9 Homework Chart

9-1 CHAPTER 9 Accounting for Receivables ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises A Problems B Problems 1. Identify the different types of receivables. 1, 2 1 2. Explain how companies recognize accounts receivable. 3 2 1, 2, 14 1A, 3A, 4A, 6A, 7A 1B, 3B, 4B, 6B, 7B 3. Distinguish between the methods and bases companies use to value accounts receivable. 4, 5, 6, 7, 8 3, 4, 5, 6, 7 3, 4, 5, 6 1A, 2A, 3A, 4A, 5A 1B, 2B, 3B, 4B, 5B 4. Describe the entries to record the disposition of accounts receivable. 9, 10, 11 8 7, 8, 9, 14 6A, 7A 6B, 7B 5. Compute the maturity date of and interest on notes receivable. 12, 13, 14, 15, 16 9, 10 10, 11, 12, 13 6A, 7A 6B, 7B 6. Explain how companies recognize notes receivable. 11 10, 11, 12 7A 7B 7. Describe how companies value notes receivable. 7A 7B 8. Describe the entries to record the disposition of notes receivable. 17 12, 13 6A, 7A 6B, 7B 9. Explain the statement presentation and analysis of receivables. 18, 19 3, 12 14, 15 1A, 6A 1B, 6B

Unformatted text preview: Solutions for Chapter 9 Auditing for Fraud Review Questions: 9-1. Fraud is very prevalent. Ernst & Young reports that the number of frauds reported between 1992 and 2002 had more than doubled, but still only 20% of frauds that occur are ever reported. The Association of Certified Fraud Examiners estimated that six percent of revenue will be lost as a result of fraud, or $600 billion per year. The 2006 Report to the Nation from the Association of Certified Fraud Auditors indicated that fraud could be costing organizations over $650 Billion per year on a global basis. 9-2. Defalcation : a type of fraud in which an employee takes assets from an organization for personal gain. Asset Misappropriation : involves the theft or misuse of an organization’s assets. It is essentially the same as defalcation and embezzlement. Corruption : fraud in which fraudsters wrongfully use their influence in a business transaction in order to procure some benefit for themselves or another person, contrary to their duty to their employer or the rights of another. Financial reporting fraud : the intentional manipulation of reported financial results to portray a misstated economic picture of the firm. The perpetrator of such a fraud seeks gain through the rise in stock price and the commensurate increase in personal wealth. The auditor’s responsibility for detecting a fraud does not differ by the type of fraud that is perpetrated. However, the auditor is not responsible for detecting immaterial frauds. 9-3. Three ways that financial reporting fraud can take place as indicated by SAS 99 are • Manipulation, falsification or alteration of accounting records or supporting documents • Misrepresentation or omission of events, transactions, or other significant information • Intentional misapplication of accounting principles Common examples are overstating revenues, capitalizing or failing to record expenses, or misclassifying liabilities. 9-4. The reporter’s statement makes sense. Defalcations, or simply taking organization’s assets, are much easier to do in small businesses that don’t have sophisticated systems of internal control. Financial reporting fraud is more likely to occur in large organizations because management often has access to vast amounts of the company’s stock. As the stock price goes up, management’s worth also increases. However, the reporter may have the mistaken sense that financial fraud only occurs rarely in smaller businesses. That is not the case. Many smaller businesses are also motivated to misstate their financial statements in order to (a) prop up the value of the company for potential sale, (b) obtain continuing financing from a bank or other financial institution, or (c) to present a picture of a company that is healthy when it may be susceptible to not remaining a going concern. Finally, smaller businesses may conduct a fraud of a different sort, i.e....
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