Question 1

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Accepted Answer

A) Trace a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file. 
B) Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial balance. 
C) Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices. 
D) Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.

Question 2

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

Accepted Answer

A) Fixed assets in the accounts exist and are in productive use. 
B) Net carrying book values in the accounts are reflected at current market values. 
C) Depreciation has been calculated properly using accepted methods and reasonable estimates of useful life and other factors. 
D) Fixed assets are properly classified in the balance sheet under appropriate descriptive captions.

Question 3

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

Accepted Answer

The answer of Auditors can compare the ________________________________ file to...

Question 4

A _____________________________ is a cover sheet containing all supporting documentation for an acquisition.
Reference: Question also found in study guide

Accepted Answer

The answer of A _____________________________ is a cover sheet containing...

Question 5

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

Accepted Answer

A) Identify usually large purchases that should be investigated further. 
B) Verify that cash disbursements were for goods actually received. 
C) Determine that purchases were properly recorded. 
D) Test whether payments were for goods actually ordered.

Question 6

The internal control questionnaire for purchases and accounts payable includes the following questions.Next to each of the questions,indicate the letter of the related transaction assertion.
A.Occurrence
B.Completeness
C.Accuracy
D.Classification
E.Cutoff -----$ \quad $1. Are vendors' monthly statements reconciled with individual accounts payable accounts?
-----$ \quad $2. Are all purchases made only on the basis of approved purchase requisitions?
-----$ \quad $3 Are vendors' invoices listed immediately upon receipt?
-----$ \quad $4. Are vendors' invoices matched against purchase orders and receiving reports before a liability is recorded?
-----$ \quad $5. Is the accounts payable customer ledger balanced periodically with the general ledger control account?
-----$ \quad $6. Does the accounting manual give instructions to date purchase entries on the date of receipt of goods?
-----$ \quad $7. Are shipping documents authorized and prepared for goods returned to vendors?
-----$ \quad $8. Is the accounts payable department notified of goods returned to vendors?

Accepted Answer

The answer of The internal control questionnaire for purchases and...

Question 7

___________________________________ and ___________________________________ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed.
Reference: Question also found in study guide

Accepted Answer

The answer of ___________________________________ and ___________________________________ can cause "unmatched" invoices...

Question 8

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Accepted Answer

A) Occurrence. 
B) Completeness. 
C) Classification. 
D) Cutoff.

Question 9

Which of the following expense accounts would not normally be tested by listing all debits and examining any significant items?

Accepted Answer

A) Legal expense. 
B) Miscellaneous expense. 
C) Repairs and Maintenance. 
D) Payroll expense.

Question 10

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

Accepted Answer

A) Valuation or allocation. 
B) Existence or occurrence. 
C) Completeness. 
D) Rights and obligations.

Question 11

Which of the following would not be included in the supporting documents for a voucher?

Accepted Answer

A) Purchase order. 
B) Vendor invoice. 
C) Receiving report. 
D) Blank check.

Question 12

The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the

Accepted Answer

A) Human resources function from the controllership function. 
B) Administrative controls from the internal accounting controls. 
C) Authorization of transactions from the custody of related assets. 
D) Operational responsibility from the record keeping responsibility.

Question 13

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.

Question 14

An auditor is planning the testing of the accounts payable balance.The auditor's main concerns should be

Accepted Answer

A) Existence and accuracy 
B) Completeness and cutoff 
C) Occurrence and cutoff 
D) Valuation and accuracy
Question is also found in study guide

Question 15

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 16

Specific balance assertions typical of accounts payable would not include

Accepted Answer

A) Recorded liabilities are obligations of the entity. 
B) Estimated liabilities are properly valued. 
C) Accounts payable are not pledged as collateral. 
D) Payables are recorded in the proper period.

Question 17

Changes to the payroll master file should be approved by human resources department.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following procedures would an auditor most likely perform in searching for unrecorded payables?

Accepted Answer

A) Reconcile receiving reports with related cash payments made just prior to year-end. 
B) Contrast the ratio of accounts payable to purchases with the prior year's ratio. 
C) Vouch a sample of creditor balances to supporting invoices,receiving reports,and purchase orders. 
D) Compare cash payments occurring after the balance sheet date with the accounts payable trial balance.

Question 19

A client's purchasing system ends with the recording of a liability and its eventual payment.Which of the following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system?

Accepted Answer

A) Accounts payable are not materially understated. 
B) Authority to incur liabilities is restricted to one designated person. 
C) Acquisition of materials is not made from one vendor or one group of vendors. 
D) Commitments for all purchases are made only after established competitive bidding procedures are followed.

Question 20

An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that

Accepted Answer

A) Payments to employees are computed at authorized rates. 
B) Employees work the number of hours for which they are paid. 
C) Separation of duties exists between the preparation and distribution of the payroll. 
D) Internal controls relating to unclaimed payroll checks are operating effectively.

Exam 8: Acquisition and Expenditure Cycle

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

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

A _____________________________ is a cover sheet containing all supporting documentation for an acquisition. Reference: Question also found in study guide

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

_ and _ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed. Reference: Question also found in study guide

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Which of the following expense accounts would not normally be tested by listing all debits and examining any significant items?

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

Which of the following would not be included in the supporting documents for a voucher?

The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the

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

An auditor is planning the testing of the accounts payable balance.The auditor's main concerns should be

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

Specific balance assertions typical of accounts payable would not include

Changes to the payroll master file should be approved by human resources department.

Which of the following procedures would an auditor most likely perform in searching for unrecorded payables?

A client's purchasing system ends with the recording of a liability and its eventual payment.Which of the following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system?

An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that

Exam 8: Acquisition and Expenditure Cycle

Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities?

Which of the following would not typically be a specific relevant assertion about fixed asset accounts?

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

A _____________________________ is a cover sheet containing all supporting documentation for an acquisition. Reference: Question also found in study guide

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal.The purpose of this substantive audit procedure most likely was to

___________________________________ and ___________________________________ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed. Reference: Question also found in study guide

In a test of controls,auditors may trace receiving reports to vouchers recorded in the voucher register.This is a test for

Which of the following expense accounts would not normally be tested by listing all debits and examining any significant items?

Cutoff tests designed to detect purchases made before the end of the year that have been recorded in the subsequent year most likely would provide assurance about management's assertion of

Which of the following would not be included in the supporting documents for a voucher?

The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the

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

An auditor is planning the testing of the accounts payable balance.The auditor's main concerns should be

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

Specific balance assertions typical of accounts payable would not include

Changes to the payroll master file should be approved by human resources department.

Which of the following procedures would an auditor most likely perform in searching for unrecorded payables?

A client's purchasing system ends with the recording of a liability and its eventual payment.Which of the following best describes auditors' primary concern with respect to liabilities resulting from the purchasing system?

An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that

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

_ and _ can cause "unmatched" invoices and related "unmatched" receiving reports to be unnoticed. Reference: Question also found in study guide