Topic Revenue and Collection Cycle Typical Activities 3 Credit checks should be

Topic revenue and collection cycle typical activities

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Topic: Revenue and Collection Cycle: Typical Activities3.Credit checks should be performed by the sales department before credit is approved. FALSEReference: Question also found in study guideAACSB: AnalyticAICPA BB: Industry
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AICPA FN: Decision MakingBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-02 Describe the revenue and collection cycle; including typical source documents and control procedures.Topic: Revenue and Collection Cycle: Typical Activities4.The aging information for accounts receivable is typically used in connection with assessing the allowance for doubtful accounts. TRUEReference: Question also found in study guideAACSB: AnalyticAICPA BB: IndustryAICPA FN: Decision MakingBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-02 Describe the revenue and collection cycle; including typical source documents and control procedures.Topic: Revenue and Collection Cycle: Typical Activities5.A comparison of checks listed on a sample of deposit slips to the detail of customer credits posted to customer accounts receivable can be an audit test for lapping. TRUEReference: Question also found in study guideAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-03 Give examples of tests of controls over customer credit approval; delivery; and recording of accounts receivable.Topic: Control Risk Assessment6.If control risk is assessed very low, the substantive audit procedures on account balances must be expanded. FALSEReference: Question also found in study guideAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-03 Give examples of tests of controls over customer credit approval; delivery; and recording of accounts receivable.
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Topic: Control Risk Assessment7.A confirmation procedure scheduled on the year-end date with a large sample of customer account balances is necessary if tests of controls reveal control weaknesses. TRUEReference: Question also found in study guideAACSB: AnalyticAICPA BB: IndustryAICPA FN: Decision MakingBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-04 Give examples of substantive procedures in the revenue and collection cycle and relate them to assertions about account balances at the end of the period.Topic: Substantive Procedures in the Revenue and Collection Cycle8.Auditors should notplace total reliance on controls to the exclusion of other substantive testing procedures. FALSEReference: Question also found in study guideAACSB: Reflective ThinkingAICPA BB: Critical ThinkingAICPA FN: Risk AnalysisBlooms: UnderstandDifficulty: 2 MediumLearning Objective: 07-03 Give examples of tests of controls over customer credit approval; delivery; and recording of accounts receivable.
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  • Fall '12
  • SMITH
  • Financial audit, collection cycle

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