Question 1

Which of the following types of owners' equity transactions would require authorization by the board of directors?

Accepted Answer

A) issuance of capital stock 
B) repurchase of capital stock 
C) declaration of dividends 
D) all of the above 
A) issuance of capital stock 
B) repurchase of capital stock 
C) declaration of dividends 
D) all of the above

Question 2

When conducting the audit of stockholders' equity,it is normal practice to verify all capital stock transactions

Accepted Answer

A) only when the client is small. 
B) that are in excess of a material amount. 
C) if there aren't very many during the year. 
D) regardless of the controls in existence,because of their materiality and permanence in the records. 
A) only when the client is small. 
B) that are in excess of a material amount. 
C) if there aren't very many during the year. 
D) regardless of the controls in existence,because of their materiality and permanence in the records.

Question 3

Which of the following balance-related audit objectives is not applicable to the audit of notes payable?

Accepted Answer

A) realizable value 
B) detail tie-in 
C) cutoff 
D) classification 
A) realizable value 
B) detail tie-in 
C) cutoff 
D) classification

Question 4

Which of the following is not an objective of the auditor's examination of notes payable?

Accepted Answer

A) to determine whether internal controls are adequate 
B) to determine whether client's financing arrangements are effective and efficient 
C) to determine whether transactions regarding the principal and interest of notes are properly authorized 
D) to determine whether the liability for notes and related interest expense and accrued liabilities are properly stated 
A) to determine whether internal controls are adequate 
B) to determine whether client's financing arrangements are effective and efficient 
C) to determine whether transactions regarding the principal and interest of notes are properly authorized 
D) to determine whether the liability for notes and related interest expense and accrued liabilities are properly stated

Question 5

What are two important internal control procedures that companies should implement to prevent misstatements in owners' equity when a company maintains its own records of stock transactions and outstanding stock?

Accepted Answer

Control procedures should include:
1. we

Question 6

Assessed control risk and results of substantive tests of transactions are normally unimportant for designing tests of details of balances for which of the following accounts?

Accepted Answer

A) accounts receivable 
B) inventory 
C) accounts payable 
D) notes payable 
A) accounts receivable 
B) inventory 
C) accounts payable 
D) notes payable

Question 7

If a company employs a capital stock registrar and/or transfer agent,the registrar or agent,or both,should be requested to confirm directly to the auditor the number of shares of each class of stock

Accepted Answer

A) surrendered and canceled during the year. 
B) authorized at the balance sheet date. 
C) issued and outstanding at the balance sheet date. 
D) sold at a price above par during the year. 
A) surrendered and canceled during the year. 
B) authorized at the balance sheet date. 
C) issued and outstanding at the balance sheet date. 
D) sold at a price above par during the year.

Question 8

Which of the following statements is correct regarding the audit of dividends?

Accepted Answer

A) The emphasis is on the ending balance in the dividends account. 
B) When auditors verify that the dividends are paid to stockholders that exist,they are concerned with the completeness objective. 
C) If the client uses a transfer agent to disburse dividends,the total can be traced to a cash disbursement entry to the agent and also confirmed. 
D) All of the above are correct statements. 
A) The emphasis is on the ending balance in the dividends account. 
B) When auditors verify that the dividends are paid to stockholders that exist,they are concerned with the completeness objective. 
C) If the client uses a transfer agent to disburse dividends,the total can be traced to a cash disbursement entry to the agent and also confirmed. 
D) All of the above are correct statements.

Question 9

Notes payable are generally for a period of sixty days or less.

Accepted Answer

A) True 
 B)False

Question 10

The shareholders' capital stock master file is used as the basis for the payment of dividends and also acts as a check on the accuracy of the common stock balance in the general ledger.

Accepted Answer

A) True 
 B)False

Question 11

The auditor's independent estimate of interest expense from notes payable uses average interest rates and

Accepted Answer

A) average notes payable outstanding. 
B) year-end notes payable outstanding. 
C) only notes payable above the level of materiality. 
D) only notes payable to major lenders. 
A) average notes payable outstanding. 
B) year-end notes payable outstanding. 
C) only notes payable above the level of materiality. 
D) only notes payable to major lenders.

Question 12

Which of the following would generally not need to be approved by the board of directors?

Accepted Answer

A) issuing capital stock 
B) repurchasing capital stock 
C) declaration of a dividend 
D) payment of a dividend 
A) issuing capital stock 
B) repurchasing capital stock 
C) declaration of a dividend 
D) payment of a dividend

Which of the following types of owners' equity transactions would require authorization by the board of directors?

When conducting the audit of stockholders' equity,it is normal practice to verify all capital stock transactions

Which of the following balance-related audit objectives is not applicable to the audit of notes payable?

Which of the following is not an objective of the auditor's examination of notes payable?

What are two important internal control procedures that companies should implement to prevent misstatements in owners' equity when a company maintains its own records of stock transactions and outstanding stock?

Assessed control risk and results of substantive tests of transactions are normally unimportant for designing tests of details of balances for which of the following accounts?

If a company employs a capital stock registrar and/or transfer agent,the registrar or agent,or both,should be requested to confirm directly to the auditor the number of shares of each class of stock

Which of the following statements is correct regarding the audit of dividends?

Notes payable are generally for a period of sixty days or less.

The shareholders' capital stock master file is used as the basis for the payment of dividends and also acts as a check on the accuracy of the common stock balance in the general ledger.

The auditor's independent estimate of interest expense from notes payable uses average interest rates and

Which of the following would generally not need to be approved by the board of directors?

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters

Exam 22: Audit of the Capital Acquisition and Repayment Cycle

Which of the following types of owners' equity transactions would require authorization by the board of directors?

When conducting the audit of stockholders' equity,it is normal practice to verify all capital stock transactions

Which of the following balance-related audit objectives is not applicable to the audit of notes payable?

Which of the following is not an objective of the auditor's examination of notes payable?

What are two important internal control procedures that companies should implement to prevent misstatements in owners' equity when a company maintains its own records of stock transactions and outstanding stock?

Assessed control risk and results of substantive tests of transactions are normally unimportant for designing tests of details of balances for which of the following accounts?

If a company employs a capital stock registrar and/or transfer agent,the registrar or agent,or both,should be requested to confirm directly to the auditor the number of shares of each class of stock

Which of the following statements is correct regarding the audit of dividends?

Notes payable are generally for a period of sixty days or less.

The shareholders' capital stock master file is used as the basis for the payment of dividends and also acts as a check on the accuracy of the common stock balance in the general ledger.

The auditor's independent estimate of interest expense from notes payable uses average interest rates and

Which of the following would generally not need to be approved by the board of directors?

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls,

Completing the Tests in the Acquisition and Payment Cycle:

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters