Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

Accepted Answer

A)   Credit manager.
B)   Treasurer.
C)   Accountant.
D)   Internal auditor.E) A) and B)
F) None of the above

Question 3

Sales are normally recorded on the date of the

Accepted Answer

A)   Customer purchase order.
B)   Bill of lading.
C)   Sales invoice.
D)   Payment check.E) A) and C)
F) B) and D)

Question 4

The SEC requires all of the following for revenue to be recognized except

Accepted Answer

A)   Cash is collected.
B)   Persuasive evidence of an arrangement exists.
C)   Delivery has occurred or services have been rendered.
D)   The seller's price to the buyer is fixed or determinable.E) B) and C)
F) All of the above

Question 5

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures.

Accepted Answer

A) True 
 B)False

Question 6

Tracing shipping documents to prenumbered sales invoices provides evidence that

Accepted Answer

A)   No duplicate shipments or billings occurred.
B)   Shipments to customers were properly invoiced.
C)   All goods ordered by customers were accounted for.
D)   All prenumbered sales invoices were accounted for.E) B) and C)
F) B) and D)

Question 7

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Accepted Answer

A)   Lapping year-end accounts receivable.
B)   Inflating sales for the year.
C)   Kiting bank balances.
D)   Misappropriating merchandise.E) C) and D)
F) None of the above

Question 8

In the revenue and collection cycle,the auditor checks the numerical sequence of shipping documents.This procedure is related to which of the following assertions?

Accepted Answer

A)   Existence.
B)   Completeness.
C)   Rights and obligations.
D)   Valuation or allocation.E) A) and B)
F) A) and C)

Question 9

Which of the following accounts is not normally part of the revenue and collection cycle?

Accepted Answer

A)   Sales.
B)   Accounts Receivable.
C)   Cash.
D)   Purchases Returns and Allowances.E) None of the above
F) C) and D)

Exam 7: Revenue and Collection Cycle

Sales are normally recorded on the date of the

Correct Answer
verified

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

Correct Answer
verified

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Correct Answer
verified

Tracing shipping documents to prenumbered sales invoices provides evidence that

Correct Answer
verified

In the revenue and collection cycle,the auditor checks the numerical sequence of shipping documents.This procedure is related to which of the following assertions?

Correct Answer
verified

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures.

Correct Answer
verified

Which of the following accounts is not normally part of the revenue and collection cycle?

Correct Answer
verified

The SEC requires all of the following for revenue to be recognized except

Correct Answer
verified

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.

Correct Answer
verified

Exam 7: Revenue and Collection Cycle

Sales are normally recorded on the date of the

Correct AnswerverifiedShow Answer

When an account receivable is considered uncollectible,the person who generally authorizes the write-off is the client's

Correct AnswerverifiedShow Answer

Which of the following might be detected by auditors' cutoff review and examination of sales journal entries for several days prior to the balance sheet date?

Correct AnswerverifiedShow Answer

Tracing shipping documents to prenumbered sales invoices provides evidence that

Correct AnswerverifiedShow Answer

In the revenue and collection cycle,the auditor checks the numerical sequence of shipping documents.This procedure is related to which of the following assertions?

Correct AnswerverifiedShow Answer

Auditors should not place total reliance on controls to the exclusion of other substantive testing procedures.

Correct AnswerverifiedShow Answer

Which of the following accounts is not normally part of the revenue and collection cycle?

Correct AnswerverifiedShow Answer

The SEC requires all of the following for revenue to be recognized except

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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