Task: What assertion is related to each issue?
1. The allowance for doubtful accounts is a fair amount.
2. All liabilities owed as of year end are included in the financial statements.
3. All purchase returns are valid.
4. Purchases during the last week of the year might be recorded after year end.
5. Accounts receivable has been factored.
6. Special-purpose entities financed a building and neither the asset or the related debt is mentioned in the financial statements.
7. Retail method of accounting is used to value items.
8. Percentage of completion method is used..
9. A client does not have trained employees to write footnote disclosures for their benefit footnote.
10. A subsidiary was purchased when stock prices were at all time highs and so goodwill may be impaired.
11. The firm issued redeemable preferred stock that must be redeemed next year.