Chapter 16 - 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. The appropriate evidence to be obtained from tests of details must be decided on a(n): easy a. efficiency basis. c b. effectiveness basis. c. audit objectives basis. d. none of the above. 4. easy Which of the following is not a balance-related audit objective evaluated in the audit of accounts receivable? a a. Occurrence b. Completeness c. Rights d. Accuracy 5. easy Tests of which balance-related audit objective are normally performed first in an audit of the sales and collection? d a. Accuracy b. Completeness c. Rights d. Detail tie-in 6. 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. 7. easy Which of the following types of receivables would not deserve the special attention of the auditor? d a. Accounts receivables with credit balances. b. Accounts that have been outstanding for a long time. c. Receivables from affiliated companies. d. Each of the above would receive special attention. Arens/Elder/Beasley
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8. easy b A listing of the balances in the accounts receivable master file at the balance sheet date, by total balance outstanding and by the amount of time the component parts have been outstanding, is the: a. customer list. b. aged trial balance. c. accounts receivable ledger. d. schedule of accounts receivable. 9. easy Testing the information on the aged trial balance for detail tie-in is a necessary audit procedure, which would normally include: a Test-footing the total column and the columns depicting the aging Comparing the total of the aged trial balance with the general ledger accounts receivable account a. Yes Yes b. No No c. Yes No d. No Yes 10. 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 embezzlements. b. Controls over cutoff. c. Controls over acquisitions. d. Controls related to the allowance for doubtful accounts. 11. Cutoff misstatements occur when: easy c The auditor fails to obtain the end- of-year bank statement directly from the bank, obtaining instead the statement which includes the two succeeding weeks Subsequent period transactions are recorded in the current period Current period transactions are recorded in the subsequent period a. Yes Yes No b. Yes No Yes c. No Yes Yes d. No Yes No 12. Cutoff misstatements occur: easy a. either by error or fraud. a
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Chapter 16 - Chapter 16 Multiple-Choice Questions 1. easy a...

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