Question

The following are various management assertions (a. through m.) related to sales and accounts receivable.

Answer 1

Answer and Explanation:

The answer is attached below.

Answer 2

Answer:

1) The Differences among the classes of management assertions

i) Management assertions about classes of transactions and events:

This is the assertion that the income and event statement of all business transactions were recorded accurately and within the correct reporting period.

ii) Management assertions about account balances:

This is the assertion that the account statement of all business transactions were accurately reported without error and within the correct reporting period.

iii) Management assertions about presentation and disclosure:

The is the assertion that the information presented within the financial statements are appropriately presented and disclosed.

2&3) The assertion classes and the name of assertion for each of the assertions made by the by  the management

a. Receivables are appropriately classified as to trade and other receivables in the financial statements and are clearly described.

Assertion class: presentation and disclosure

Name of assertion: Understandability

b. Sales transactions have been recorded in the proper period.

Assertion class: Transactions and events

Name of assertion: Cutoff

c. Accounts receivable are recorded at the correct amounts.

Assertion class: Account balances

Name of assertion: Valuation

d. Sales transactions have been recorded in the appropriate accounts.

Assertion class: Transaction and events

Name of assertion: Classification

e. All required disclosures about sales and receivables have been made.

Assertion class: Presentation and disclosure

Name of assertion: completeness

f. All accounts receivable have been recorded.

Assertion class: Account balances

Name of assertion: Existence

g. Disclosures related to receivables are at the correct amounts.

Assertion class: Presentation and disclosure

Name of assertion: Accuracy

h. Sales transactions have been recorded at the correct amounts.

Assertion class: Transaction and events

Name of assertion: Accuracy

i. Recorded accounts receivable exist.

Assertion class: Account balances

Name of assertion: Existence

j. Disclosures related to sales and receivables relate to the entity.

Assertion class: Presentation and disclosure

Name of assertion: Occurrence

k. Recorded sales transactions have occurred.

Assertion class: Transactions and events

Name of assertion: Occurrence

l. There are no liens or other restrictions on accounts receivable.

Assertion class: Account balance s

Name of assertion: Rights and obligations

m. All sales transactions have been recorded.

Assertion class: Transaction and events

Name of assertion: Occurrence