Question 1

The accounts payable department receives the purchase order form to accomplish all of the following except:

Accepted Answer

A) Compare invoice price to purchase order price. 
B) Ensure the purchase had been properly authorized. 
C) Ensure the goods had been received by the party requesting the goods. 
D) Compare quantity ordered to quantity purchased. 
A) Compare invoice price to purchase order price. 
B) Ensure the purchase had been properly authorized. 
C) Ensure the goods had been received by the party requesting the goods. 
D) Compare quantity ordered to quantity purchased.

Question 2

Which statement is correct with respect to accounts payable confirmations?

Accepted Answer

A) The negative form is used in most circumstances. 
B) Accounts with new suppliers are always confirmed. 
C) They are a required auditing procedure. 
D) They are more frequently used in situations in which some vendors don't send monthly statements. 
A) The negative form is used in most circumstances. 
B) Accounts with new suppliers are always confirmed. 
C) They are a required auditing procedure. 
D) They are more frequently used in situations in which some vendors don't send monthly statements.

Question 3

An internal control narrative indicates that an approved voucher is required to support every check request for payment of merchandise.Which of the following procedures provides the greatest assurance that this control is operating effectively?

Accepted Answer

A) Select and examine vouchers and ascertain that the related canceled checks are dated no later than the vouchers. 
B) Select and examine vouchers and ascertain that the related canceled checks are dated no earlier than the vouchers. 
C) Select and examine canceled checks and ascertain that the related vouchers are dated no earlier than the checks. 
D) Select and examine canceled checks and ascertain that the related vouchers are dated no later than the checks. 
A) Select and examine vouchers and ascertain that the related canceled checks are dated no later than the vouchers. 
B) Select and examine vouchers and ascertain that the related canceled checks are dated no earlier than the vouchers. 
C) Select and examine canceled checks and ascertain that the related vouchers are dated no earlier than the checks. 
D) Select and examine canceled checks and ascertain that the related vouchers are dated no later than the checks.

Question 4

To avoid potential errors and fraud a well-designed internal control in the accounts payable area should include a separation of which of the following functions?

Accepted Answer

A) Cash disbursements and invoice verification. 
B) Invoice verification and merchandise ordering. 
C) Physical handling of merchandise received and preparation of receiving reports. 
D) Check signing and cancellation of payment documentation. 
A) Cash disbursements and invoice verification. 
B) Invoice verification and merchandise ordering. 
C) Physical handling of merchandise received and preparation of receiving reports. 
D) Check signing and cancellation of payment documentation.

Question 5

Which of the following procedures for detecting unrecorded transactions at the client's December 31 year-end is least likely to result in discovery of an unrecorded year-end account payable?

Accepted Answer

A) Examination of invoices received after year-end. 
B) Examination of vouchers payable entered in the January voucher register. 
C) Examination of January receiving reports prepared for goods shipped FOB destination in December to the client. 
D) Confirmation of year-end accounts payable. 
A) Examination of invoices received after year-end. 
B) Examination of vouchers payable entered in the January voucher register. 
C) Examination of January receiving reports prepared for goods shipped FOB destination in December to the client. 
D) Confirmation of year-end accounts payable.

Question 6

The confirmation of existing accounts payable proves the completeness of recorded accounts payable.

Accepted Answer

A) True 
 B)False

Question 7

The auditors' search for unrecorded liabilities is completed:

Accepted Answer

A) During an interim period. 
B) At the balance sheet date. 
C) Subsequent to the balance sheet date. 
D) At any time during the examination. 
A) During an interim period. 
B) At the balance sheet date. 
C) Subsequent to the balance sheet date. 
D) At any time during the examination.

Question 8

It is less important to maintain effective internal control over accounts payable as it is to maintain effective internal control over accounts receivable.

Accepted Answer

A) True 
 B)False

Question 9

Accounts payable generally present the auditors with difficult valuation problems.

Accepted Answer

A) True 
 B)False

Question 10

Internal control over accounts payable is improved when:

Accepted Answer

A) Vendor statements are reconciled with the accounts payable ledger. 
B) Informal bids are obtained. 
C) Annual trial balance of accounts payable subsidiary ledgers is required. 
D) Payment is made upon approval of the purchasing agent. 
A) Vendor statements are reconciled with the accounts payable ledger. 
B) Informal bids are obtained. 
C) Annual trial balance of accounts payable subsidiary ledgers is required. 
D) Payment is made upon approval of the purchasing agent.

Question 11

When the auditors discover an understatement of liabilities,they would most likely also expect to find an:

Accepted Answer

A) Understatement of assets. 
B) Understatement of owners' equity. 
C) Overstatement of expenses. 
D) Understatement of revenues. 
A) Understatement of assets. 
B) Understatement of owners' equity. 
C) Overstatement of expenses. 
D) Understatement of revenues.

Question 12

The primary objective of the auditors' examination of accounts payable is to determine whether payments are made on a timely basis.

Accepted Answer

A) True 
 B)False

Question 13

Accounts payable from an officer should be classified separately from other accounts payable.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following could most likely be performed efficiently with data analytics?

Accepted Answer

A) Confirmation of accounts payable. 
B) Identification of payables from purchases of goods that do not have evidence of receipt of the goods. 
C) Identification of unrecorded accounts payable. 
D) Review of vendors' statements. 
A) Confirmation of accounts payable. 
B) Identification of payables from purchases of goods that do not have evidence of receipt of the goods. 
C) Identification of unrecorded accounts payable. 
D) Review of vendors' statements.

Question 15

Which of the following best describes the auditors' approach to the audit of accrued liabilities?

Accepted Answer

A) Test computations. 
B) Confirmation. 
C) Observation. 
D) A low planned assessed level of control risk. 
A) Test computations. 
B) Confirmation. 
C) Observation. 
D) A low planned assessed level of control risk.

Question 16

The auditors may decide to confirm accounts payable on an audit engagement.
a.Describe two reasons why the confirmation of accounts payable is not a presumptively mandatory auditing procedure.
b.Describe the audit circumstances in which the auditors are likely to decide to confirm accounts payable.
c.Describe the types of accounts payable the auditors are likely to select for confirmation.

Accepted Answer

a.Confirmation of accounts payable is no

Question 17

Which of the following best describes the specific accounts payable that are selected for confirmation?

Accepted Answer

A) Accounts with large balances. 
B) Accounts with zero balances. 
C) Accounts with a large amount of activity regardless of their balance. 
D) Accounts for which vendor statements are available. 
A) Accounts with large balances. 
B) Accounts with zero balances. 
C) Accounts with a large amount of activity regardless of their balance. 
D) Accounts for which vendor statements are available.

Question 18

Accrued liabilities generally differ from accounts payable in that accrued liabilities:

Accepted Answer

A) Are often based on estimates. 
B) Are usually confirmed at year-end. 
C) Depend upon the existence of a transaction for original recording of the account. 
D) Are never included in cost of goods sold. 
A) Are often based on estimates. 
B) Are usually confirmed at year-end. 
C) Depend upon the existence of a transaction for original recording of the account. 
D) Are never included in cost of goods sold.

Question 19

An auditor wishes to perform tests of controls on a client's cash disbursements relating to accounts payable.If the control procedures leave no audit trail of documentary evidence,the auditor most likely will test the procedures by:

Accepted Answer

A) Confirmation and observation. 
B) Observation and inquiry. 
C) Analytical procedures and confirmation. 
D) Inquiry and analytical procedures. 
A) Confirmation and observation. 
B) Observation and inquiry. 
C) Analytical procedures and confirmation. 
D) Inquiry and analytical procedures.

Question 20

Which of the following is the best control procedure to prevent the payment of an invoice twice?

Accepted Answer

A) Review of supporting documentation by the person signing the check. 
B) Requiring dual signatures on checks. 
C) Use of a check protector. 
D) Reconciliation of vendor statements to accounts payable. 
A) Review of supporting documentation by the person signing the check. 
B) Requiring dual signatures on checks. 
C) Use of a check protector. 
D) Reconciliation of vendor statements to accounts payable.

The accounts payable department receives the purchase order form to accomplish all of the following except:

Which statement is correct with respect to accounts payable confirmations?

An internal control narrative indicates that an approved voucher is required to support every check request for payment of merchandise.Which of the following procedures provides the greatest assurance that this control is operating effectively?

To avoid potential errors and fraud a well-designed internal control in the accounts payable area should include a separation of which of the following functions?

Which of the following procedures for detecting unrecorded transactions at the client's December 31 year-end is least likely to result in discovery of an unrecorded year-end account payable?

The confirmation of existing accounts payable proves the completeness of recorded accounts payable.

The auditors' search for unrecorded liabilities is completed:

It is less important to maintain effective internal control over accounts payable as it is to maintain effective internal control over accounts receivable.

Accounts payable generally present the auditors with difficult valuation problems.

Internal control over accounts payable is improved when:

When the auditors discover an understatement of liabilities,they would most likely also expect to find an:

The primary objective of the auditors' examination of accounts payable is to determine whether payments are made on a timely basis.

Accounts payable from an officer should be classified separately from other accounts payable.

Which of the following could most likely be performed efficiently with data analytics?

Which of the following best describes the auditors' approach to the audit of accrued liabilities?

Which of the following best describes the specific accounts payable that are selected for confirmation?

Accrued liabilities generally differ from accounts payable in that accrued liabilities:

An auditor wishes to perform tests of controls on a client's cash disbursements relating to accounts payable.If the control procedures leave no audit trail of documentary evidence,the auditor most likely will test the procedures by:

Which of the following is the best control procedure to prevent the payment of an invoice twice?

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters

Exam 14: Accounts Payable and Other Liabilities

The accounts payable department receives the purchase order form to accomplish all of the following except:

Which statement is correct with respect to accounts payable confirmations?

An internal control narrative indicates that an approved voucher is required to support every check request for payment of merchandise.Which of the following procedures provides the greatest assurance that this control is operating effectively?

To avoid potential errors and fraud a well-designed internal control in the accounts payable area should include a separation of which of the following functions?

Which of the following procedures for detecting unrecorded transactions at the client's December 31 year-end is least likely to result in discovery of an unrecorded year-end account payable?

The confirmation of existing accounts payable proves the completeness of recorded accounts payable.

The auditors' search for unrecorded liabilities is completed:

It is less important to maintain effective internal control over accounts payable as it is to maintain effective internal control over accounts receivable.

Accounts payable generally present the auditors with difficult valuation problems.

Internal control over accounts payable is improved when:

When the auditors discover an understatement of liabilities,they would most likely also expect to find an:

The primary objective of the auditors' examination of accounts payable is to determine whether payments are made on a timely basis.

Accounts payable from an officer should be classified separately from other accounts payable.

Which of the following could most likely be performed efficiently with data analytics?

Which of the following best describes the auditors' approach to the audit of accrued liabilities?

Which of the following best describes the specific accounts payable that are selected for confirmation?

Accrued liabilities generally differ from accounts payable in that accrued liabilities:

An auditor wishes to perform tests of controls on a client's cash disbursements relating to accounts payable.If the control procedures leave no audit trail of documentary evidence,the auditor most likely will test the procedures by:

Which of the following is the best control procedure to prevent the payment of an invoice twice?

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property,plant,and Equipment: Depreciation and Depletion

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Reports

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Internal, operational, and Compliance Auditing

Filters