Question

List 2 assertions for each account below & the risk associated with each account/assertions

Sales Returns & allowances

Sales Discounts

Warranty Liability

Sales Tax Payable

Deferred Revenue

Repair & Maintenance Expense

Rent Expense

Disposable Expense

Cost of Goods Sold

Equipment

Accumulated Depreciation

Accounts Payable

Answer 1

Items	Assertions	Risk Associated
Sales Return & Allowances	1.Existence	Whether all Sale Returns are Properly Authorized and actually occurred
	2. Completenes	Whether Sale Returns and Allowances are completed till entry and its effect on taxation.
Sales Discounts	1.Accuracy	Whether Discounts given are Normal or abnormal
	2.Existence	Whether Sale Discounts actually given or not
Warranty Liability	1.Valuation	Whether Its Valuation has been made on Correct method
	2.Presentation & Disclosure	Whether it is Presented appropriately as per the governing standards
Sale tax Payable	1. Accuracy	Whether It is recorded accurately
	2.Presentation & Disclosure	Whether its Presentation is as per the accounting standard under the appropriate head
Deferred Revenue	1.Valuation	Whether Deferred Revenue Valuation is appropriate
	2. Existence	Whether Deferred Revenue really exists
Repair & Maintenance Exp.	1.Existence	Whether Expenses actually incurred or fake
	2. Cutoff	Whether all Expenses Recorded in the current period
Rent Expense	1.Existence	Whether Expenses actually incurred or fake
	2. Cutoff	Whether all Expenses Recorded in the current period
Disposable Expense	1.Existence	Whether Expenses actually incurred or fake
	2. Cutoff	Whether all Expenses Recorded in the current period
Cost of goods sold	1.Valuation	Whether Cost Methods are applied appropriately
	2. Existence	Whether Cost of goods sold include fake bills
Equipment	1.Existence	Whether Company owns the Equipment.
	2.Rights and Obligations	Whether Company has all the rights over it
Accumulated Depreciation	1.Valuation	Whether it is calculated as per the governed standards
	2. Presentation & Disclosure	Whether it is Presented under the Appropriate head in the Financial Statement
Accounts Payable	1. Existence	Whether Accounts payable really exists
	2. Rights and Obligations	Whether Company really owe money to them