QZ Review - Chapter 11 YourResults 1CORRECT A B rec

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Chapter 11 Your Results: The correct answer for each question is indicated by a  . 1 CORRECT The best control to  prevent  lapping is: A) Separation of recordkeeping for receivables from custody of cash. B) Separation of authorization of sales transactions from recordkeeping for accounts  receivable. C) Timely reconciliation of the bank account by an individual not involved in recordkeeping  for receivables. D) Comparison of the total per the daily bank deposit ticket with the total recorded in the  cash receipts journal by an individual otherwise independent of the cash receipts  function. INCORRECT The most practical and effective audit procedure for  detecting  lapping is: A) Preparing an interbank transfer schedule. B) Comparing recorded cash receipts in detail against items making up the bank deposit  as shown on duplicate deposit slips validated by the bank. C) Tracing recorded cash receipts to postings in customers' ledger cards. D) Preparing a proof of cash. INCORRECT An analysis of the aged accounts receivables is most directly related to which substantive  test objective? A) Existence and occurrence. B) Presentation and disclosure. C) Rights and obligations. D) Valuation. 4 CORRECT Which of the following is one of the most conclusive forms of evidence in establishing the 
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existence of accounts receivable? A) Close inspection of notes on hand and verification with company personnel. B) Comparisons of last year's receivables with current year amounts to test for  reasonableness. C) The confirmation of accounts. D) Contacting a credit reporting agency to determine the credit worthiness of customers. 5 CORRECT Which of the following would be  least  likely todiminish the validity of evidence obtained from  confirmation of accounts receivable? A) The confirmation requests are sent on the client's letterhead. B) The confirmation requests are mailed to clients by the internal auditors. C) The mailing addresses on the confirmation requests are verified by the client's  mailroom personnel. D) The return address on the envelopes used to send the confirmation requests is the  exact office address that the CPAs work in at the client's premises. 6 CORRECT
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This note was uploaded on 10/13/2010 for the course ACCTG 403 at Penn State.

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QZ Review - Chapter 11 YourResults 1CORRECT A B rec

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