8. An effective procedure to test for unfilled shipments is to trace from the

B) shipping documents to the sales journal.

A) sales journal to the shipping documents.

C) sales journal to the accounts receivable ledger.

D) sales journal to the general ledger sales account.

10. Which type of misstatement is always a fraud?

C) shipments made to nonexistent customers and recorded as sales

A) sales included in the journals for which no shipment was made

B) sales to related parties, such as officers and subsidiaries

D) sales recorded more than once.

15. Which of the following test of controls is useful to test the completeness objective for cash receipts?

B) Observe endorsement of incoming checks.

A) Compare shipping documents with sales records.

C) Examine evidence that the receivable master file is reconciled to the general ledger.

D) Observe if the client reconciles the bank account.

16. The auditor's primary concern in performing audit procedures of the write-off of uncollectible accounts relates to the risk that the client writes off customer accounts that have already been collected. The primary control for preventing this fraud is

B) examining the uncollectible account authorization form.

examining authorized credit memos.

D examining the vouchers payable register.

17. Which of the following is an accurate statement regarding the risk assessment process of phase I of the audit process for the sales and collection cycle?

A) Auditors must perform substantive tests related to assertions deemed to have significant risks.

B) The auditor must relate control risk for transaction-related audit objectives to balance-related audit objectives in deciding planned inherent risk.

C) The realizable value balance-related audit objectives are affected by assessed control risk for classes of transactions.

18. The understatement of sales and accounts receivable is best uncovered by

C) substantive tests of transactions for shipments made but not recorded.

B) testing the aged accounts receivable trial balance.

D) substantive tests of transactions for bad debts.

19. Which of the following is likely to be determined first when performing tests of details for accounts receivable?

B) Accounts receivable in the aged trial balance agree with related master file amounts, and the total is correctly added and agrees with the general ledger.

A) Recorded accounts receivable exist.

C) The client has a right to the accounts receivable.

D) Existing accounts receivable are included.

20. The most important aspect of evaluating the client's method of obtaining a reliable cutoff is to

B) evaluate the client's control procedures around cutoff

A) perform extensive detailed testing of cutoff.

C) confirm a sample of transactions near period end with customers.

D) confirm transaction with customers.

21. You are reviewing sales to discover cutoff problems. If the client's policy is to record sales when title to the merchandise passes to the buyer, then the books and records would contain errors if the December 31 entries were for sales recorded

A) before the merchandise was shipped.

B) at the time the merchandise was shipped.

C) several days subsequent to shipment.

D) at a time after the point at which title passed.

22. Which of the following is the principle "weakness" of using negative confirmations for the tests of details of balances for accounts receivable?

C) Conclusions drawn from receiving no reply may not be correct.

A) They can only be used for large balance accounts.

B) They cannot not be used when account balances "bunch" around a mean value.

D) Response rates are generally too low to draw any conclusions.

23. A positive confirmation is more reliable evidence than a negative confirmation because

D) follow-up procedures are performed if a response is not received from the debtor.

A) fewer confirmations can be sent out.

B) the auditor has a document which can be used in court.

C) the debtor's lack of response indicates agreement with the stated balance.

24. The overall objective in the audit of the acquisition and payment cycle is

C) to evaluate whether the affected accounts are fairly presented in accordance with accounting

A) to ensure the reliability of the affected accounts.

B) to ensure the accuracy of the affected accounts.

D) to evaluate whether fraudulent payments were made.

25. A document indicating a reduction in the amount owed to a vendor because of returned goods is

D) a contractual adjustment form.

26. At what point in the acquisition and payment cycle do most companies first recognize the acquisition and related liability on their records?

D) when the company receives the goods or services from the vendor

A) The personnel in the receiving department should be independent of the storeroom personnel.

B) when the purchase order is prepared

C) when the company receives the invoice from the vendor

27. Which of the following is not an accurate statement regarding the acquisition and payment cycle?

D) The accounting department should be responsible for receiving goods and preparing the receiving report.

A) The personnel in the receiving department should be independent of the storeroom personnel.

B) Goods received should be physically controlled from the time of their receipt until their use or disposal

C) Accounting records should transfer responsibility for the goods each time they are moved.

28. When testing the controls for the completeness transaction-related audit objectives,

D) the audit time for accounts payable can be the auditor properly tests those controls. reduced if the client has effective internal controls and

failure to record the acquisition of goods or services will generally understate net income.

B) failure to record the acquisition of goods or services has no impact on the balance sheet.

C) it is generally easy for the auditor to determine whether unrecorded transactions exist.

30. Which of the following is the most effective control procedure to detect vouchers that were prepared for the payment of goods that were not received?

B) Match purchase order, receiving report, and vendor's invoice for each voucher in accounts payable department.

A) Count goods upon receipt in storeroom.

C) Compare goods received with goods requisitioned in receiving department.

D) Verify vouchers for accuracy and approval in internal audit department.

31. Auditors are especially concerned about the and balance-related audit objectives because of the potential for understatements in the account balance.

C) classification; realizable value

32. By tracing receiving reports issued at and before year-end to vendors' invoices and making sure they are included in accounts payable, the auditor is testing for

A) theft of merchandise by employees.

33. Which of the following is not a typical audit procedure performed as part of the out-of-period liability tests?

A) Examine underlying documentation for cash disbursements made during the last month of the year.

B) Examine underlying documentation for bills not paid several weeks after the year-end.

C) Trace receiving reports issued before year-end to related vendors' invoices.

35. One of the auditor's primary concerns in verifying the transfer of inventory from one location veil bhe to another is that

B) all actual transfers are recorded.

C) the quantity, date, and description of all recorded transfers are accurate.

36. You are auditing the inventory account and are concerned about the possibility of an inventory overstatement. What is the best audit procedure to detect damaged inventory?

A) Observe the condition of inventory during the client's physical count.

B) Compare the condition of inventory from the previous year's count to the current year.

C) Compare inventory turnover from the previous year's inventory to the current year's inventory.

D) Reconcile the inventory counts to the cost accounting records.

37. McKesson & Robbins Company is a well-known audit case involving auditor responsibility. What occurred at the McKesson & Robbins Company to change the way in which auditors audit inventory?

A) The company recorded nonexistent inventory.

B) The auditor did not perform any audit tests of the inventory.

C) The auditor and company colluded to overstate inventory balances.

D) The company counted inventory three months prior to year-end.

38. A common inventory observation procedure is to select a random sample of tag numbers and identify the tag with that number attached to the actual inventory item. The audit objective being achieved by this procedure is

A) inventory as recorded on tags actually exists (existence).

B) existing inventory is counted and tagged (completeness).

C) inventory is counted accurately (accuracy).

D) inventory is classified correctly (classification).

39. Auditors need to understand the client's physical inventory count controls before the count of the inventory begins so that

B) the auditors can make constructive suggestions as to the adequacy of the procedures.

A) the auditors can accurately count and tag the inventory for the client.

C) the client will be informed on exactly what items the auditor intends to test count.

D) the auditor can communicate any weaknesses directly to the audit committee.

40. If an auditor were concerned with obtaining evidence about the appropriateness of the value of inventory, which of the following tests would be most appropriate?

C) confirmation of inventory held by outside parties

D) physical examination of the inventory

TRẮC NO KIỂM 1

Quiz

•

Mathematics

•

University

•

Practice Problem

•

Medium

Used 5+ times

FREE Resource

C) The credit granting function should be separate from the sales function.

D.All of the above are accurate statements.

Access all questions and much more by creating a free account

Create resources

Host any resource

Get auto-graded reports

Continue with Google

Continue with Email

Continue with Classlink

Continue with Clever

or continue with

Microsoft

Apple

Others

Already have an account?

Similar Resources on Wayground

36 questions

Name the Quadrilateral

Quiz

•

10th Grade - University

37 questions

FAST 6TH MATH 2024

Quiz

•

6th Grade - University

40 questions

คอมพิวเตอร์และระบบสารสนเทศเพื่องานอาชีพ ชอ.2/1

Quiz

•

University

40 questions

Grade 7 FAST MATH Review Final

Quiz

•

7th Grade - University

37 questions

1.31 Extended Friday's DOL

Quiz

•

9th Grade - University

35 questions

Bivariate Data

Quiz

•

8th Grade - University

42 questions

Quadratic Functions and Graphs

Quiz

•

9th Grade - University

44 questions

Adding & Subtracting Integers

Quiz

•

7th Grade - University

Popular Resources on Wayground

15 questions

Fractions on a Number Line

Quiz

•

3rd Grade

20 questions

Equivalent Fractions

Quiz

•

3rd Grade

25 questions

Multiplication Facts

Quiz

•

5th Grade

54 questions

Analyzing Line Graphs & Tables

Quiz

•

4th Grade

$fractions$

22 questions

fractions

Quiz

•

3rd Grade

20 questions

Main Idea and Details

Quiz

•

5th Grade

20 questions

Context Clues

Quiz

•

6th Grade

15 questions

Equivalent Fractions

Quiz

•

4th Grade

Discover more resources for Mathematics

20 questions

Ch. 7 Quadrilateral Quiz Review

Quiz

•

KG - University

7 questions

Introduction to Fractions

Interactive video

•

1st Grade - University

18 questions

Exam Review

Quiz

•

University

16 questions

Parallel, Perpendicular, and Intersecting Lines

Quiz

•

KG - Professional Dev...

25 questions

Math College Placement Practice #2

Quiz

•

11th Grade - University

10 questions

One Step Equations Multiply and Divide

Quiz

•

University

TRẮC NO KIỂM 1

39 questions

What critical event must take place before goods can be shipped in order to assure payment can be reasonably expected?

2. Which of the following is not an important aspect of billing?

3. In the accounts receivable master file, the length of time the account has been due can be useful to the client and the auditor in preparing the

4. A is a list prepared when cash is received by someone who has no responsibility for recording sales, accounts receivable, or cash, and who has no access to the accounting records.

5. Which of the following is a correct statement regarding the shipment of goods?

6. When sales invoices are automatically calculated and posted by a computer, the auditor may be able to reduce substantive tests of transactions for which, if any, assertion? accuracy

7. Which of the following is an accurate statement relating to separation of duties?

8. An effective procedure to test for unfilled shipments is to trace from the

10. Which type of misstatement is always a fraud?

11. Which of the following would least concern an auditor regarding the lack of a specific authorization to conduct the sales transaction?

Access all questions and much more by creating a free account

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Mathematics