1. Which of the following accounts in a merchandising company is affected by both the revenue cycle and another cycle?;a. sales;b. sales returns and allowances;c. inventory;d. accounts receivable;e. accounts payable;2. The audit objective, "The accounts receivable balance represents gross claims on customers and agrees with the sum of the accounts receivable subsidiary ledger" is derived from the assertion of;a. existence or occurrence.;b. completeness.;c. rights and obligations.;d. valuation or allocation.;e. presentation or disclosure.;3. The bonding of employees will normally be expected to;a. "weed out" dishonest employees already hired.;b. eliminate the need for separation of duties in the cash receipts area.;c. guarantee that all employee fraud will be prevented.;d. provide reasonable assurance that all employees will perform their jobs with the utmost integrity.;e. serve as a deterrent to dishonesty.;4. A company policy states that annual vacations are mandatory for all employees. This policy is most important for employees who;a. are not bonded.;b. handle cash receipts.;c. maintain the detailed accounting records.;d. have access to the general ledger.;e. serve as inventory clerks.;5. In a credit-merchandising environment, which of the following documents usually initiates the activity in the sales cycle?;a. shipping document;b. customer order;c. material requisition;d. sales invoice;e. sales order;6. Controls designed to reduce the risk of omissions, duplications, incorrect pricing, and other types of errors in the billing process include all of the following except;a. comparison of control totals for shipping documents with corresponding totals for sales invoices.;b. computer matching of sales invoice information with purchase order information.;c. computer matching of sales invoice information with sales order and shipping information.;d. computer-programmed checks on the mathematical accuracy of sales invoices.;e. computer matching of sales prices with an authorized price list and sales order prices in preparing the sales invoices.;7. Use of modern point-of-sale terminals to record over-the-counter cash sales provides all of the following except;a. an immediate visual display for the customer to verify the accuracy of price and cash tendered.;b. a printed receipt for the customer.;c. an internal record of the transaction on a computer file or tape locked inside the terminal/register.;d. assurance that all cash sales are processed through the system.;e. printed control totals of the day's receipts processed on the device.;8. The use of a lockbox system enhances controls over cash receipts because the post office box is directly controlled by the;a. mailroom staff.;b. internal audit department.;c. treasurer.;d. chief financial officer.;e. company's bank.;9. In most merchandising firm audits, the auditor's concern over sales adjustment transactions is based upon the;a. sheer number and value of these transactions.;b. implication these transactions have for operating efficiency.;c. poor controls normally found over these transactions and the inherent lack of documentation.;d. lack of proper authorization for these transactions.;e. potential use of these transactions to conceal a theft of cash.;17. The taking of a physical inventory by a client is normally done according to a plan or a list of instructions. The client's instructions should include the following matters except;a. date of the counts.;b. names of employees responsible for observing the inventory taking.;c. locations to be counted.;d. segregation or identification of goods not owned.;e. detailed instructions on how the counts are to be made.;18. Inherent risk for the valuation or allocation assertion will be high in the personnel services cycle when;a. employee turnover is low.;b. factory workers are paid based on production.;c. payroll checks are drawn from a separate imprest bank account.;d. pay periods are weekly.;e. employee absenteeism is minimal.;23. The substantive test of inspecting plant asset additions is categorized under;a. initial procedures.;b. analytical procedures.;c. tests of details of transactions.;d. tests of details of balances.;e. presentation and disclosure.
Paper#26817 | Written in 18-Jul-2015Price : $37