The conversion process results in outputs that are eventually sold to customers

A business maintains subsidiary accounts for each of its customers On May 15, the business sells services on account: $2,100 to customer J. Simmons; $4,000 to customer A. Jones; and $1,500 to customer J. Williams. Which journal entry is needed to record this sales transaction?

A) May 15 Accounts Receivable 7,600 Service Revenue 7,600 B) May 15 Accounts Receivable - J. Simmons 2,100 Accounts Receivable - A. Jones 4,000 Accounts Receivable - J. Williams 1,500 Service Revenue 7,600 C) May 15 Service Revenue 7,600 Accounts Receivable 7,600 D) May 15 Accounts Receivable Control 7,600 Sales Revenue 7,600 May 15 Accounts Receivable - J. Simmons 2,100 Accounts Receivable - A. Jones 4,000 Accounts Receivable - J. Williams 1,500 Accounts Receivable - Control 7,600

One of your clients recently upgraded its accounting system from a medium-scale general ledger package to a complex state-of-the-art enterprise resource planning system. This installation took place over the last nine months of the entity's fiscal year and is nearly 100% complete by the balance sheet date. Which of the following best describes the main affect of this event on the audit risk model for the current year?

A) It will likely increase the risk of material misstatement. B) It will likely decrease the risk of material misstatement. C) It will likely decrease the audit risk. D) It will likely increase the detection risk.