A. Using the following trial balance and adjustments, prepare a Balance Sheet as of 30 June 1994:
|Trial balance, 30 June 1994||(Dollars)||(Dollars)|
|Pledged contributions unpaid||251,200||-|
|Miscellaneous operating expenditures||17,204||-|
|Unpaid Expenditures (unliquidated obligations)||19,325||-|
|Unliquidated obligations payable||-||19,325|
|Income from pledged contributions||-||200,000|
|Fund Balance 1 January 1994||-||207,852|
1. $3,000 of the $5,000 salary advances granted has been earned by staff members during the month of June 1994.
2. The unpaid pledged contribution of the Government of Country X was paid in cash on 28 June through the UNDP office and the Resident Representative sent a cable request to have the amount reflected in the statements. The cash contribution was transferred to Chemical Bank, New York by cable.
3. The cost of insurance premium which was paid in advance on 1 January was for a one-year policy. Fifty percent of the value of the prepaid insurance had expired.
4. The United Nations received a firm pledge for a contribution of $50,000 from the Government of Country X on 30 June 1994 through the Economic Commission for Latin America and the Caribbean which was not yet included in the trial balance.
B. As part of an overall review and study of a major computerized Electronic Data Processing (EDP) financial system, what are the procedures which should be performed by an independent auditor to evaluate internal controls?
a) Prepare entries to record the issue of the note.
b) Assume that at the end of each month High Company recorded in its books the accrual of interest. Prepare month end entries.
c) Show entries for the check issued on the first maturity date.
d) Show entries for the check issued at the second maturity date
a) Discuss the possible financial implications of foreign exchange differences (including a fall or rise in the local currency, and a fall or rise in the US dollar).
b) Briefly discuss the following exchange rate policies:
(i) a managed floating exchange rate;
(ii) a fixed exchange rate linked to a basket of currencies; and
(iii) a fixed exchange rate backed by a currency board system.
Suggested reading includes basic textbooks and periodicals in the field of finance covering the following topics:
- Accounting - Auditing - Financial Administration - Investments - Treasury
Examination Sample: General Paper (P2)