Chap011 - Chapter 11 Accounts Receivable Notes Receivable...

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Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Chapter 11 Accounts Receivable, Notes Receivable, and Revenue Chapter 11 Accounts Receivable, Notes Receivable, and Revenue Answer Key True / False Questions 1. The department approving a sales transaction should be the shipping department. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Bloom's: Remember Difficulty: Easy Learning Objective: 11-03 Describe the documents; records; and accounts that compose the revenue (sales) transactions cycle and the fundamental controls over receivables and revenue. Topic: Receivables 2. Accounts receivable that are written-off should not be turned over to a collection agency. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement Bloom's: Remember Difficulty: Easy Learning Objective: 11-03 Describe the documents; records; and accounts that compose the revenue (sales) transactions cycle and the fundamental controls over receivables and revenue. Topic: Receivables 11-1
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Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 3. An aged trial balance of accounts receivable may provide evidence on the adequacy of the allowance for uncollectible accounts. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement AICPA FN: Risk Analysis Bloom's: Remember Difficulty: Easy Learning Objective: 11-06 Assess the risks of material misstatement of receivables and revenue and design further audit procedures; including tests of controls and substantive procedures; to address the risks. Topic: Audit of Receivables and Revenue 4. Confirmation of accounts receivable by direct communication with the debtor tests the existence of accounts receivable. TRUE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement AICPA FN: Risk Analysis Bloom's: Remember Difficulty: Easy Learning Objective: 11-06 Assess the risks of material misstatement of receivables and revenue and design further audit procedures; including tests of controls and substantive procedures; to address the risks. Topic: Audit of Receivables and Revenue 11-2
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Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 5. Confirmation requests should contain a "business reply" envelope addressed to the auditors at the client's address. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement AICPA FN: Risk Analysis Bloom's: Understand Difficulty: Medium Learning Objective: 11-06 Assess the risks of material misstatement of receivables and revenue and design further audit procedures; including tests of controls and substantive procedures; to address the risks. Topic: Audit of Receivables and Revenue 6. CPAs use negative accounts receivable confirmation requests more frequently than positive accounts receivable confirmation requests. FALSE AACSB: Analytic AICPA BB: Industry AICPA FN: Measurement AICPA FN: Risk Analysis Bloom's: Understand Difficulty: Medium Learning Objective: 11-06 Assess the risks of material misstatement of receivables and revenue and design further audit procedures; including tests of controls and substantive procedures; to address the risks.
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