Chapter19 - final

Auditing and Assurance Services (12th Edition)

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CHAPTER 19 Multiple-Choice Questions 1. The classes of transactions in the acquisition and payment cycle include acquisition of: easy a. goods. d b. goods and services. c. goods and services, and cash disbursements. d. goods and services, cash disbursements, and purchase returns and allowances. 2. The overall objective in the audit of the acquisition and payment cycle is: easy a. to ensure the reliability of the affected accounts. c b. to ensure the accuracy of the affected accounts. c. to evaluate whether the affected accounts are fairly stated in accordance with GAAP. d. all of the above. 3. The audit of the acquisition and payment cycle often takes ____ time to audit than other cycles. easy a. less c b. about the same c. more d. no less 4. What typically initiates the acquisitions and payment cycle? easy a. Issuance of a purchase requisition or request for purchase of goods/services. a b. Issuance of payment to vendor. c. Approval of a new vendor. d. None of the above. 5. What typically ends the acquisitions and payment cycle? easy a. Issuance of a purchase requisition or request for purchase of goods/services. b b. Issuance of a payment to a vendor. c. Approval of a new vendor. d. None of the above. 6. easy The receipt of goods and services in the normal course of business represents the date clients normally recognize: b a. income. b. the liability. c. warranty assets. d. expenses. 7. Which of the following accounts is not included in the acquisitions class of transactions? easy a. Inventory. c b. Prepaid expenses. c. Purchase discounts. d. Accounts payable. 19-1
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8. A document indicating a reduction in the amount owed to a vendor because of returned goods is: easy a. a debit memo. a b. a credit memo. c. a receiving room report. d. a shipping room report. 9. easy A document used by organizations to establish a formal means of recording and controlling acquisitions which usually contains a package of documents about the acquisition is the: a a. voucher. b. purchase order. c. receiving report. d. purchase requisition. 10. The accounts payable account includes obligations for the acquisition of: easy a. raw materials. d b. equipment. c. utilities. d. all three of the above. 11. easy Comparing expenses to prior years is an effective analytical procedure for accounts payable because expenses from year to year are: d a. erratic. b. variable. c. dynamic. d. relatively stable. 12. The overall objective in the audit of accounts payable is to determine whether accounts payable: easy a. is fairly stated and properly disclosed. a b. is overstated. c. is understated. d. is accurately stated. 13. At what point do most companies recognize liabilities in the acquisition and payment cycle? easy
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Chapter19 - final - CHAPTER 19 Multiple-Choice Questions 1....

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