What exactly is the difference between Rights and obligation or Valuation or allocation when talking about management's financial statement assertions
Related questions
Understanding the management assertions related to a specificcontrol is an important factor in preparing the tests of controls.Using the assertions provided below, select the managementassertion(s) that relates to the purpose of the controls in thetable. (A management assertion may be selected once, more thanonce, or not at all.)
Management Assertions
(a) Existence or occurrence
(b) Completeness
(c) Rights and obligations
(d) Valuation or allocation
(e) Presentation and disclosure
(f) Authorization
(g) Cutoff
Purpose of Control | Management Assertion |
|---|---|
To ensure that credit is approved before a sale is executed andservice is provided or goods are shipped | |
To ensure that transactions shown as sales are properlyclassified | |
To ensure that when cash receipts are recorded they show cashthat was actually received by the company and deposited | |
To ensure that cash receipts transactions are properly posted tothe accounts receivable subsidiary ledger and general ledger | |
To ensure that all cash received by the company is deposited andrecorded in the cash receipts journal and that amounts and details,including the date, are shown correctly | |
To ensure that sales transactions are recorded based on thecorrect dates |
