Exam 11: The Revenues, Receivables, and Receipts Process and Cash Account Balance

Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk?

The most effective audit procedure for determining if an account receivable will be collected is ________.

An auditor confirms a representative number of open accounts receivable as of December 31 and investigates exceptions and comments noted by respondents.By this procedure,the auditor is most likely to learn of which of the following?

An auditor is most likely to review an entity's practice of periodically accounting for the numerical sequence of shipping documents and invoices as evidence and support for management's financial statement assertion of ________.

To determine whether sales transactions have been recorded in the proper accounting period,the auditor performs cutoff tests.Which of the following best describes the overall approach used when performing cutoff tests?

In the course of examining the cutoff bank statement for a client,an auditor is puzzled to discover that none of the cheques listed as outstanding on the year-end bank reconciliation has cleared the bank.This could be an indication that the client ________.

Cash receipts procedures should include steps for authorizing and recording discounts when the customer takes them.

The packing slip authorizes the transfer of inventory from the warehouse to the shipping department and to then to the customer.

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when ________.

In the audit of accounts receivable,negative confirmations are not normally used if ________.

Selecting a sample of debits from customer accounts receivable records and vouching them to supporting sales invoices is an audit procedure designed to obtain evidence about the control objective of ________.

If an auditor selects a sample of customer accounts receivable and traces payment credits to remittance worksheets and bank deposits,the auditor is testing the control objective of completeness.

One of the key assertions to consider in obtaining evidence about accounts receivable is completeness.

Auditors should consider the possibility of kiting if there are frequent deposits of round amounts.

A lock box system is an effective way to segregate the custody of cash.

Cash receipts from sales on account terms of 2/10,net 30 have been misappropriated.Which of the following acts would conceal this defalcation and be least likely to be detected by an auditor?

Typical source documents involved in the revenue and collection cycle would be ________.

Which of the following internal control procedures is most likely to ensure that all billed sales are correctly posted to the accounts receivable subsidiary ledger?

Is the confirmation of cash and accounts receivable required according to auditing standards? Explain.

The most frequent reconciliation is the comparison of the sum of customers' unpaid balances with the accounts receivable control account total.Usually,this reconciliation is done with a(n)________.