tif_ch16 - CHAPTER 16 Multiple-Choice Questions 1 easy a...

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CHAPTER 16 Multiple-Choice Questions 1. easy Which of the following is not a balance-related audit objective evaluated in the audit of accounts receivable? a a. Timing. b. Realizable value. c. Completeness. d. Accuracy. 2. The two primary classes of transactions in the sales and collection cycle are easy a. sales and sales discounts. b b. sales and cash receipts. c. sales and sales returns. d. sales and accounts receivable. 3. easy For most audits, inherent risk for accounts receivable is moderate or low except for which balance-related audit objectives? d a. Timing and realizable value. b. Completeness and existence. c. Existence and accuracy. d. Realizable value and cutoff. 4. easy Which of the following types of receivables would not deserve the special attention of the auditor? d a. Accounts with credit balances. b. Accounts that have been outstanding for a long time. c. Receivables from affiliated companies. d. Accounts where no reply was received to a negative confirmation request. 5. easy A listing of the balances in the accounts receivable master file at the balance sheet date, by total balance outstanding and by the time the component parts have been outstanding, is the b a. customer list. b. aged trial balance. c. accounts receivable ledger. d. schedule of accounts receivable. 6. easy Testing the information on the aged trial balance for detail tie-in is a necessary audit procedure, which would normally include d a. test footing the total column and the columns depicting the aging. b. comparing the total of the trial balance with the general ledger accounts receivable account. c. tracing a sample of individual balances to supporting documents. d. all of the above. 7. easy Auditors are often concerned with three aspects of internal controls related to the sales and collection cycle. Which of the following is not one of those controls? c a. Controls that detect or prevent defalcations. b. Controls over cutoff. c. Controls over inventory acquisitions. d. Controls related to the allowance for doubtful accounts such as credit approval. 16-1
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8. Cutoff misstatements occur when easy d a. the auditor mistakenly asks the bank for the end-of-year bank statement instead of the statement which would include the two succeeding weeks. b. subsequent period transactions are recorded in the current period. c. current period transactions are recorded in the subsequent period. d. both b and c above, but not a. 9. Generally accepted accounting principles require that material sales returns and allowances easy a. be recorded in the period when the merchandise is returned. c b. be recorded in the period when the credit memo is issued. c. be matched with related sales. d.
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This note was uploaded on 03/18/2011 for the course ACCT 422 taught by Professor Smith during the Spring '11 term at UMBC.

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tif_ch16 - CHAPTER 16 Multiple-Choice Questions 1 easy a...

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