[sunchip]

Hey Guys,

This is a question from my Gleim CPA Task Based Sims and I was hoping you guys could help me because I’m missing something huge here. The question states:

Select from the pop-up boxes the correcting entry in the general ledger if one is necessary for each of the following issues. Double-click on each blank box to see a list of answer choices and click on your selection. Each choice may be used once, more than once, or not at all. Select the debited account first for each entry necessary. If no entry is necessary, select “No entry necessary” for both rows.

You are considering these issues during an audit shortly after the client’s 12/31/Year 1 year end.

Am I supposed to do correcting entries for Y1 or Y2?

For example:

A cutoff test of purchases revealed that a shipment from a vendor was made FOB shipping point for an amount of $40,000 on 12/28/Y1. It was received by the client on 1/5/Y2 and recorded on that date.

My inclination would be to back out the Y2 entry:

Dr- A/P

Cr- Inv

And add it to Y1 with the opposite:

Dr- Inv

Cr- A/P

The question only asks me to enter 1 JE though. Which one are they looking for and why?

AUD (89)
FAR (81)
REG (April 2)
BEC (May 22)

gleim boy through and through

[Anonymous]

I've learned that some of these test bank ?s in the various test banks contain errors and a poorly worded. I'm guessing the y2 adjustment is what they aRe counting as the adjusting entry. They r probably saying the yr 1 entry is just the standard correct entry and not an adjusting entry. Your logic is correct so I'd just say it's a poorly written ?

[Kimboroni]

How many lines do they give you? If they give you enough lines to do your plan, then maybe they are considering that all to be one entry.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[sunchip]

Thanks for responding.

I submitted with the Y2 entries and (of course) they wanted the Y1 entries.

Is there a difference between correcting and adjusting entries that is the key here?

I always thought correcting entries were for mistakes and adjusting entries were for accruals.

Could just be a poorly worded question.

EDIT: You are given two lines aka 1 Dr and 1 Cr

AUD (89)
FAR (81)
REG (April 2)
BEC (May 22)

gleim boy through and through

[Mamabear]

They are being audited on the Year 1 balance so the adjusting entry would be what you need to do to correct Year 1. I have always used correcting and adjusting interchangebly.

CPA Exam - Finally DONE (November 2014)
BEC (08/10/13) 80
AUD (08/24/13) 65 (11/13/13) 85
FAR (04/12/14) 81
REG (07/19/14) 69 (11/29/14) 87!!

[Kimboroni]

Yes, sounds poorly worded. I think you'll find the real exam to be better written and vetted than review programs generally are, so don't stress out about it.

AUD 84 (1/9/14-Wiley books/TB + free materials)
FAR 83 (5/21/14-the above + NINJA 10 Pt Combo Lite)
REG 84 (7/9/14-Wiley books/TB + NINJA Audio/FC/Notes)
BEC 76 (10/5/14-Wiley books/TB + NINJA Audio/FC)

Disclaimer: My ninja avatar is not meant to imply that I have any affiliation with this site other than being a forum member. That's a pic of a T-shirt that my daughter gave me for my birthday. 🙂

[Anonymous]

Agreed. In my experience th exam questions are very clear. That's why they pretest them so much.

[Author]

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