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Magpie co SEP/DEC 2022

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Magpie co SEP/DEC 2022

  • This topic has 1 reply, 2 voices, and was last updated 10 months ago by Kim Smith.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • August 29, 2024 at 6:20 pm #710514
    menpagalhoon
    Participant
    • Topics: 73
    • Replies: 35
    • ☆☆

    AUDIT RISK
    The payables ledger clerk has carried out supplier statement reconciliations during the year and for a number of suppliers, the supplier statements have shown a balance owing by the company which is higher than the balance on the list of individual supplier balances. These differences have been included as reconciling items on the supplier statement reconciliations, but no further investigation has been carried out on these differences.

    There is a risk that cut-off is incorrect, resulting in trade payables, cost of sales and expenses being
    understated.

    I don’t understand how they have arrived at the conclusion of “expenses” also being understated…

    We know that Dr Purchases Cr Payables, so I get how payables and cos are understated…

    How is expenses understated?

    August 29, 2024 at 6:23 pm #710515
    Kim Smith
    Keymaster
    • Topics: 134
    • Replies: 8304
    • ☆☆☆☆☆

    Because not all trade payable are for goods/purchases, they include services … rent, rates, electricity. Internet, telephone ….

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