Question 1

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

Accepted Answer

A)  Purchase requisitions and accounts payable entries. 
B)  Receiving reports and purchase orders. 
C)  Purchase requisitions and purchases orders. 
D)  Purchase orders and bid quotes. 
A)  Purchase requisitions and accounts payable entries. 
B)  Receiving reports and purchase orders. 
C)  Purchase requisitions and purchases orders. 
D)  Purchase orders and bid quotes.

Question 2

If a person is absent from the company due to illness or vacation,their paycheck should be returned to the payroll department.

Accepted Answer

A) True 
 B)False

Question 3

Auditors may conclude that depreciation charges are too small by noting

Accepted Answer

A)  insured values much larger than book values. 
B)  large numbers of fully depreciated assets. 
C)  frequent trade-ins of relatively new assets. 
D)  large and frequent losses on assets retired. 
A)  insured values much larger than book values. 
B)  large numbers of fully depreciated assets. 
C)  frequent trade-ins of relatively new assets. 
D)  large and frequent losses on assets retired.

Question 4

R.Budd,the purchasing agent of Lake Hardware Wholesalers,has a relative who owns a retail hardware store.Budd arranged for hardware to be delivered by manufacturers to the retail store on a cash-on-delivery (COD)basis,thereby enabling his relative to buy at Lake's wholesale prices.Budd was probably able to accomplish this because of Lake's poor internal control over

Accepted Answer

A)  purchase requisitions. 
B)  cash receipts. 
C)  perpetual inventory records. 
D)  purchase orders. 
A)  purchase requisitions. 
B)  cash receipts. 
C)  perpetual inventory records. 
D)  purchase orders.

Question 5

When auditing PP&E,the auditor's approach is generally to

Accepted Answer

A)  examine evidence supporting the amounts in the ending balance. 
B)  examine evidence supporting additions during the year. 
C)  follow a reliance strategy, testing internal controls and analytical procedures. 
D)  concentrate on finding unrecorded assets. 
A)  examine evidence supporting the amounts in the ending balance. 
B)  examine evidence supporting additions during the year. 
C)  follow a reliance strategy, testing internal controls and analytical procedures. 
D)  concentrate on finding unrecorded assets.

Question 6

Failure to record a liability generally results in

Accepted Answer

A)  an understatement of profit. 
B)  an understatement of current ratio. 
C)  an overstatement of profit. 
D)  an overstatement of assets. 
A)  an understatement of profit. 
B)  an understatement of current ratio. 
C)  an overstatement of profit. 
D)  an overstatement of assets.

Question 7

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

Accepted Answer

A)  occurrence only. 
B)  occurrence and accuracy only. 
C)  completeness only. 
D)  accuracy only. 
A)  occurrence only. 
B)  occurrence and accuracy only. 
C)  completeness only. 
D)  accuracy only.

Question 8

When considering assertions and obtaining evidence about accounts payable,auditors must put emphasis on the _____________________________ assertion.
Question also found in study guide

Accepted Answer

The answer of When considering assertions and obtaining evidence about...

Question 9

Bill of ladings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number.

Accepted Answer

A) True 
 B)False

Question 10

When auditing liabilities account balances,auditors are most concerned with management' assertion about

Accepted Answer

A)  existence. 
B)  rights and obligations. 
C)  completeness. 
D)  valuation and allocation. 
A)  existence. 
B)  rights and obligations. 
C)  completeness. 
D)  valuation and allocation.

Question 11

The receiving department receives a "blind" copy of the purchase order which does not include the vendor's name and address.

Accepted Answer

A) True 
 B)False

Question 12

Vouchers should be stamped PAID to

Accepted Answer

A)  prevent duplicate payment. 
B)  generate a new purchase order. 
C)  indicate posting in the voucher register. 
D)  facilitate preparation of the bank reconciliation. 
A)  prevent duplicate payment. 
B)  generate a new purchase order. 
C)  indicate posting in the voucher register. 
D)  facilitate preparation of the bank reconciliation.

Question 13

Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?

Accepted Answer

A)  Purchase orders are not prepared for services acquired directly under authorization of department heads. 
B)  The same person authorizes voucher packages and signs checks. 
C)  Unacceptable goods are not scheduled on receiving reports. 
D)  The same person signs checks and stamps vouchers PAID. 
A)  Purchase orders are not prepared for services acquired directly under authorization of department heads. 
B)  The same person authorizes voucher packages and signs checks. 
C)  Unacceptable goods are not scheduled on receiving reports. 
D)  The same person signs checks and stamps vouchers PAID.

Question 14

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

Accepted Answer

A) True 
 B)False

Question 15

Vendor invoices should be compared to _______________________________ and ________________________________ to determine that the vendor is charging the approved price and for quantity received.
Question also found in study guide

Accepted Answer

purchase o

Question 16

When the _________________________________,______________________________ and _________________________ are in hand,the accountants can record the accounts payable.
Question also found in study guide

Accepted Answer

purchase order ; ven

Question 17

Paychecks should be written to a payroll bank account that is used only for payroll.

Accepted Answer

A) True 
 B)False

Question 18

To provide assurance that each voucher is submitted and paid only once,an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is

Accepted Answer

A)  supported by a vendor's invoice. 
B)  stamped "paid" by the check signer. 
C)  prenumbered and accounted for. 
D)  approved for authorized purchases. 
A)  supported by a vendor's invoice. 
B)  stamped "paid" by the check signer. 
C)  prenumbered and accounted for. 
D)  approved for authorized purchases.

Question 19

Auditors can compare the ________________________________ file to the _________________________________ to determine whether the company has material unrecorded liabilities on the financial statement date.
Question also found in study guide

Accepted Answer

unmatched

Question 20

When using confirmations to provide evidence about the completeness assertion for accounts payable,the appropriate population most likely would be

Accepted Answer

A)  vendors with whom the entity has previously done business. 
B)  amounts recorded in the accounts payable subsidiary ledger. 
C)  payees of checks drawn in the month after the year-end. 
D)  invoices filed in the entity's open invoice file. 
A)  vendors with whom the entity has previously done business. 
B)  amounts recorded in the accounts payable subsidiary ledger. 
C)  payees of checks drawn in the month after the year-end. 
D)  invoices filed in the entity's open invoice file.

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

If a person is absent from the company due to illness or vacation,their paycheck should be returned to the payroll department.

Auditors may conclude that depreciation charges are too small by noting

When auditing PP&E,the auditor's approach is generally to

Failure to record a liability generally results in

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

When considering assertions and obtaining evidence about accounts payable,auditors must put emphasis on the _____________________________ assertion. Question also found in study guide

Bill of ladings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number.

When auditing liabilities account balances,auditors are most concerned with management' assertion about

The receiving department receives a "blind" copy of the purchase order which does not include the vendor's name and address.

Vouchers should be stamped PAID to

Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

Vendor invoices should be compared to _ and __ to determine that the vendor is charging the approved price and for quantity received. Question also found in study guide

When the _______, and _ are in hand,the accountants can record the accounts payable. Question also found in study guide

Paychecks should be written to a payroll bank account that is used only for payroll.

To provide assurance that each voucher is submitted and paid only once,an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is

Auditors can compare the file to the _ to determine whether the company has material unrecorded liabilities on the financial statement date. Question also found in study guide

When using confirmations to provide evidence about the completeness assertion for accounts payable,the appropriate population most likely would be

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 8: Acquisition and Expenditure Cycle

What evidence is appropriate to determine whether recorded purchase transactions are valid and the vendors charged the correct prices?

If a person is absent from the company due to illness or vacation,their paycheck should be returned to the payroll department.

Auditors may conclude that depreciation charges are too small by noting

When auditing PP&E,the auditor's approach is generally to

Failure to record a liability generally results in

Tracing a sample of time clock cards to payroll registers (journals)is a procedure designed to obtain evidence about the transaction assertion(s)of

When considering assertions and obtaining evidence about accounts payable,auditors must put emphasis on the _____________________________ assertion. Question also found in study guide

Bill of ladings for goods shipped from a vendor to the purchasing company should always include the company's purchase order number.

When auditing liabilities account balances,auditors are most concerned with management' assertion about

The receiving department receives a "blind" copy of the purchase order which does not include the vendor's name and address.

Vouchers should be stamped PAID to

Which of the following situations indicates a potential material weakness in internal control over acquisition and expenditure?

The accounts payable department reconciles the vendor invoice,purchase order,and receiving report prior to approving the payment to the vendor.

Vendor invoices should be compared to _______________________________ and ________________________________ to determine that the vendor is charging the approved price and for quantity received. Question also found in study guide

When the _________________________________,______________________________ and _________________________ are in hand,the accountants can record the accounts payable. Question also found in study guide

Paychecks should be written to a payroll bank account that is used only for payroll.

To provide assurance that each voucher is submitted and paid only once,an auditor most likely would examine a sample of paid vouchers and determine whether each voucher is

Auditors can compare the ________________________________ file to the _________________________________ to determine whether the company has material unrecorded liabilities on the financial statement date. Question also found in study guide

When using confirmations to provide evidence about the completeness assertion for accounts payable,the appropriate population most likely would be

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Vendor invoices should be compared to _ and __ to determine that the vendor is charging the approved price and for quantity received. Question also found in study guide

When the _______, and _ are in hand,the accountants can record the accounts payable. Question also found in study guide

Auditors can compare the file to the _ to determine whether the company has material unrecorded liabilities on the financial statement date. Question also found in study guide