Question :
To conceal defalcations involving receivables, the auditor could expect an experienced bookkeeper to charge which of the subsequent accounts?
Select one:
a. sales returns.
b. miscellaneous income.
c. miscellaneous expense.
d. petty cash.
Question 2
To evaluate whether the system of internal accounting control operated efficiently to minimize errors of failure to invoice a shipment, the auditor could select a sample of transactions from the population shown by the
Select one:
a. open invoice file.
b. customer order file.
c. bill of lading file.
d. sales invoice file.
Question 3
An entity with a large volume of customer remittances by mail most probable could reduce the risk of employee misappropriation of cash by using
Select one:
a. daily check summaries.
b. employee fidelity bonds.
c. independently prepared mailroom prelists.
d. a bank lock-box system.
Question 4
Shipping documents could be compared with sales records or invoices to
Select one:
a. make sure that shipments are billed to customers.
b. evaluate whether payments are applied properly to customer accounts.
c. ascertain whether all sales are supported by shipping documents.
d. evaluate whether unit prices billed are in accordance with sales contracts.
Question 5
Which of the subsequent controls most likely would be effective in offsetting the tendency of sales personnel to maximize sales volume at the expense of high bad-debt write-offs?
Select one:
a. Employees involved in the credit-granting function are separated from the sales function.
b. Shipping documents and sales invoices are matched by an employee who does not have authority to write off bad debts.
c. Subsidiary accounts receivable records are reconciled to the control account by an employee independent of the authorization of credit.
d. Employees responsible for authorizing sales and bad debt write-offs are denied access to cash.
Question 6
Proper authorization methods in the revenue cycle generally provide for the approval of bad-debt write-offs by an employee in which of the subsequent departments?
Select one:
a. sales.
b. treasurer.
c. accounts receivable.
d. billing.