18 Jun WHICH OF THE FOLLOWING IS A BUSINESS FUNCTION
WHICH OF THE FOLLOWING IS A BUSINESS FUNCTION RELATED TO SALES RETURNS AND ALLOWANCES?
September 20, 2018Posted by: kajo No Comments
purchase order.
purchase requisition.
voucher.
receiving report
31
One unique characteristic of the capital acquisition and repayment cycle is that relatively few transactions affect the account balances, but each transaction is often highly material in amount.
False
True
32
Smaller privately held companies may not maintain an accounts payable master file by vendor. These companies pay on the basis of:
dunning letters.
vendors’ monthly statements.
individual vendors’ invoices.
the accounts payable account in the general ledger
33
Which of the following is an analytical procedure to determine if there is idle equipment or equipment that was disposed of but not written off?
Compare depreciation expense divided by gross equipment cost with previous years.
Compare accumulated depreciation divided by gross equipment cost with previous years.
Compare annual repairs and maintenance accounts with previous years.
Compare gross manufacturing cost divided by some measure of production with previous years.
34
A sample in which the characteristics of the sample are the same as those of the population is a(n):
variables sample.
random sample.
attributes sample.
representative sample.
35
Which of the following tests are typically not necessary when auditing a client’s schedule of recorded disposals?
Footing the schedule
All of the above are necessary.
Tracing cost and accumulated depreciation of the disposals to the property master file
Tracing schedule totals to the general ledger
36
To determine if a sample is truly representative of the population, an auditor would be required to:
use systematic sample selection.
never use sampling because of the expense involved.
conduct multiple samples of the same population.
audit the entire population
37
Which of the following is a business function related to sales returns and allowances?
Processing customer orders
Writing off uncollectible accounts
Granting credit
Processing and recording credit memos
38
You are auditing Manufacturing Company and testing the audit related objective of completeness for the equipment accounts. Which of the following audit procedures is most likely to achieve your objective?
Physically examine assets.
Examine vendor invoices of closely related accounts such as repairs and maintenance.
Trace individual acquisitions to the fixed asset master file.
Examine vendor invoices and receiving reports.
39
Which of the following is not one of the business functions for the payroll and personnel cycle?
Timekeeping and payroll preparation
Reconciliation of payroll account
Payment of payroll
Human resources and employment
40
Which of the following is a correct statement regarding audit evidence?
Evidence is usually more reliable for balance sheet accounts when it is obtained within six months of the balance sheet date.
A large sample of evidence provided by an independent party is always considered persuasive evidence.
The auditor must obtain a sufficient amount of relevant and reliable evidence to form an opinion on the fairness of the financial statements.
A small sample of only one or two pieces of highly appropriate evidence is always considered persuasive evidence
41
Accrued payroll taxes are normally considered to be associated with the acquisition and payment cycle.
True
False
42
Because cash is the most desirable asset for people to steal, it has a higher:
control risk.
detection risk.
liquidity risk.
inherent risk.
43
The computer file used for recording payroll transactions for each employee and maintaining total wages paid for the year to date is the: 44
44.The total of the individual employee earnings in the payroll master file should equal the total:
gross payroll plus the total contributed by the employer for payroll taxes.
balance of gross payroll in general ledger accounts.
of the checks drawn to employees for payroll.
gross pay for the current week’s payroll.
payroll transaction file.
payroll tax returns.
payroll master file.
payroll bank account reconciliation.
45
Auditors are especially concerned with three aspects of internal control for the sales and collection cycle. Which of the following is not one of their major concerns?
Controls over sales discounts
Controls over cutoff
Controls that prevent or detect embezzlements
Controls related to the allowance for uncollectible accounts
46
The two primary classes of transactions in the sales and collection cycle are:
sales and cash receipts.
sales and sales returns.
sales and accounts receivable.
sales and sales discounts
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