ACCT444 Week 5 Quiz Latest 2017

Question Question 1 3 / 3 pts (TCO 6) The auditor looks for an indication on duplicate sales invoices to see whether the invoices have been verified. This is an example of a test of details of balances. a test of control. a substantive test of transactions. both a test of control and a substantive test of transactions. Question 2 3 / 3 pts (TCO 6) Analytical procedures are defined in the auditing standards as compliance tests. substantive tests. tests of controls. helpful procedures not possessing the validity of other tests available to the auditor. Question 3 3 / 3 pts (TCO 6) Which of the following audit tests is usually the most costly to perform? Analytical procedures Tests of controls Tests of balances Substantive tests of transactions Question 4 3 / 3 pts (TCO 6) Which of the following represents an incorrect pairing of a type of audit test and evidence? Procedures to obtain an understanding of internal controls—documentation Analytical procedures—ratio analysis Substantive tests of transactions—confirmation Tests of details of balances—physical examination Question 5 3 / 3 pts (TCO 6) The purpose of tests of controls is to provide reasonable assurance that the accounting treatment of transactions and balances is valid and proper. internal control procedures are functioning as intended. entity has complied with GAAP disclosure requirements. entity has complied with requirements of quality control. Question 6 3 / 3 pts (TCO 9) It is important that sales be billed and recorded in the journal as soon as possible after the order is received. the order is received and credit is approved. credit is approved and it is verified that there is enough inventory to fill the order. the shipment takes place. Question 7 3 / 3 pts (TCO 9) Which one of the following is not an auditor's concern about a key authorization point in the sales or collection cycle? The receiving room must have authorization before releasing items to inventory control. Credit must be authorized before the sale. Goods must be shipped after the authorization. Prices must be authorized. Question 8 3 / 3 pts (TCO 9) To achieve good internal control, which department should perform the activities of matching shipping documents with sales orders and preparing daily sales summaries? Billing Shipping Credit Payables Question 9 3 / 3 pts (TCO 9) When designing substantive tests of transactions for sales, the auditor is concerned with the possibility of several types of misstatements. Which of the following is not one of the types of these misstatements? Sales being included in the journal for which no shipment was made Sales to related parties, such as officers and subsidiaries Sales recorded more than once Shipments being made to nonexistent customers and recorded as sales Question 10 3 / 3 pts (TCO 9) A key internal control in the sales and collection cycle is the separation of duties between cash handling and record keeping. The objective most directly associated with this control is to verify that cash receipts recorded in the cash receipts journal are reasonable. cash receipts are properly classified. recorded cash receipts result from legitimate transactions. existing cash receipts are recorded.