Question 1: The following question deal with internal controls in the sales and collection cycle. Choose the best response. The accounting system will not post a sales transaction to the sales journal without a valid bill of lading number. This control is most relevant to which transaction-related objective for sales? (1)Accuracy (3) Completeness (2) Occurrence (4) Posting and summarization Question 2: Which of the following is most likely to be detected by an auditor’s review of an entity’s sales cutoff? a. Unrecorded sales for the year. b. Lapping of year-end accounts receivable. c. Excessive sales discounts. d. Unauthorized goods returned for credit Question 3: When goods are received, the receiving clerk should match the goods with: a. The purchase order and the requisition form. b. The vendor invoice and the receiving report. c. The vendor shipping document and the purchase order. d. The receiving report and the vendor shipping document Question 4: In a properly designed purchasing process, the same employee most likely would match vendors’ invoices with receiving reports and also: a. Post the detailed accounts payable records. b. Recomputed the calculations on vendors’ invoices. c. Reconcile the accounts payroll ledger. d. Cancel vendors’ invoices after payment
Question 5: Purchase cutoff procedures should be designed to test whether all inventory: a. Purchased and received before the end of the year was paid for. b. Ordered before the end of the year was received. c. Purchased and received before the end of the year was recorded. d. Owned by the company is in the possession of the company at the end of the year Question 6: In performing tests concerning the granting of stock options, an auditor should a.
- Fall '19