Which of the following would be the best protection for a company that wishes to prevent the lapping?
6. Which of the following would be the best protection for a company that wishes to prevent the “lapping” of trade accounts receivable? Separate duties so that the bookkeeper in charge of the general ledger has no access to incoming mail.
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded?
Which of the following controls most likely would help ensure that all credit sales transactions of an entity are recorded? The billing department supervisor matches prenumbered shipping documents with entries in the sales journal. The sequential numbering of documents provides a standard control over transactions.
Which of the following is most likely to be detected by an auditor’s review of an entity’s sales cut off?
Which of the following is most likely to be detected by an auditor’s review of an entity’s sales cutoff? Unrecorded sales for the year. The auditor cannot infer that all nonrespondents have verified their account information. The negative request form of accounts receivable confirmation is useful particularly when….
Which of the following internal control procedures would most likely deter lapping of collections from customers?
Which of the following internal control activities most likely would deter lapping of collections from customers? Separation of duties between receiving cash and posting the accounts receivable ledger.
Which of the following audit procedures would most likely detect lapping?
A practical and effective audit procedure for the detection of lapping is: Comparing recorded cash receipts in detail against items making up the bank deposit as shown on duplicate deposit slips validated by the bank. Which of the following is not a control that generally is established over cash receipts?
Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk?
Which of the following audit procedures is most likely to detect lapping by the accounts receivable clerk? cheque list on the bank reconciliation.
What does kiting mean?
insufficient funds
Which of the following controls is most effective in providing assurance that recorded purchases are free of material errors?
Which of the following controls is most effective in providing assurance that recorded purchases are free of material errors? Purchase orders, receiving reports, and vendors’ invoices are independently matched in preparing vouchers.
Which of the following is the most effective control activity to detect vouchers?
The most effective control activity to detect vouchers that were prepared for the payment of goods that were not received is to match the purchase order, receiving report, and vendor’s invoice for each voucher in the accounts payable department.
Which of the following is correct regarding internal control?
The correct answer is letter “A”: An inherent limitation to internal control is the fact that controls can be circumvented by management override.
Which one of the following situations represents an internal control weakness in the payroll department?
Which one of the following situations represents an internal control weakness in the payroll department? Answer (B) is correct. Paychecks should not be distributed by supervisors because an unscrupulous person could terminate an employee and fail to report the termination.
What is the advantage of a payroll computer system?
Easy Calculations With an electronic payroll system, you can forget about time and human error. Payroll software takes your timekeeping data and calculates your crew’s time and paychecks automatically. Whether you pay by the minute or by the quarter-hour, a digital system takes care of turning time into money.
Which function should distribute paychecks?
Which function should distribute paychecks? Correct option is c. Justification: Paymaster distributes the check: Paymaster is the individual key who is independent in the payroll department that distributes the check; hence the possibility of fraud can be avoided due to segregation of responsibilities.
When confirming accounts payable emphasis should be put on what kind of accounts?
Terms in this set (38) When confirming accounts payable, emphasis should be put on what kind of accounts? Accounts with small or zero balances.
In which of the following circumstances would a qualified opinion not be appropriate?
a disclaimer of opinion on the entity’s financial statements. In which of the following circumstances would a qualified opinion not be appropriate? a violation of generally accepted accounting principles is sufficiently material and pervasive that a qualified opinion is not justified.
Which of the following audit procedures is best for identifying unrecorded trade accounts payable?
Which of the following audit procedures is best for identifying unrecorded trade accounts payable? Reviewing cash disbursements recorded subsequent to the balance sheet date to determine whether the related payable applies to the prior period.
What is the usual source of journal entries to record the purchase of inventory in the general ledger?
Terms in this set (32) What is the usual source of journal entries to record the purchase of inventory in the general ledger? Sales invoices updated with cost data from the inventory records department.
Which document or record is used in the write off of uncollectible accounts classes of transactions?
credit memo
Which of the following procedures would an auditor most likely rely on to verify management’s assertion of completeness?
Which of the following procedures would an auditor most likely rely on to verify management’s assertion of completeness? – Observing the entity’s distribution of payroll checks. – Confirming a sample of recorded receivables by direct communication with the debtors.
Which of the following is likely the most effective audit procedure for the verification of the legal ownership of real property?
Which of the following is likely the most effective audit procedure for the verification of the legal ownership of real property? Examination of deeds and title guaranty policies on hand. Expenditures for fixed assets have been capitalized.
For which of the following ledger accounts would the auditor be most likely to analyze the details to identify understatements of equipment acquisitions?
Establish the basis for depreciable assets and verify the depreciation expense. For which of the following ledger accounts would the auditor be most likely to analyze the details to identify understatements of equipment acquisitions? Repairs and maintenance expense.
Which of the following is likely to be determined first when performing tests of details for accounts receivable?
Which of the following is likely to be determined first when performing tests of details for accounts receivable? Accounts receivable in the aged trial balance agree with related master file amounts, and the total is correctly added and agrees with the general ledger.
Which of the following is the best evidence of real estate ownership at the balance sheet date?
Which of the following is the best evidence of real estate ownership at the balance sheet date? Paid real estate tax bills.
What are the primary transactions in the sales and collection cycle?
The two primary classes of transactions in the sales and collection cycle are: sales and cash receipts. The appropriate and sufficient evidence to be obtained from tests of details must be decided on an: audit objectives basis.
Which is more reliable a positive accounts receivable confirmation or a negative accounts receivable confirmation?
Positive confirmations are more reliable because the auditor can perform follow-up procedures if a response is not received from the customer. With a negative confirmation, failure to reply must be regarded as a correct response, even though the debtor may have ignored the confirmation request.
Which accounts are involved in the sales class of transactions?
The sales class and receipts class of transactions are the typical journal entries that debit accounts receivable. Companies allow and credit sales revenue, and debit cash and credit accounts receivable, respectively. These are the recording of the sales and cash collection of the sale.
What are the classes of transactions in the sales and collection cycle?
29 Cards in this Set
| What are the 5 classes of transactions in the sales & collection cycle? | 1) Sales 2) Cash receipts 3) Sales Returns & allowances 4) Charge-off of uncollectible accounts 5) Estimate of bad debt expense |
|---|---|
| Prenumbered documents exists to prevent both: | Failure to bill or record sales and duplicate billings |
What is the purpose of the general ledger?
A general ledger, or GL, is a means for keeping record of a company’s total financial accounts. Accounts typically recorded in a general ledger include: assets, liabilities, equity, expenses, and income or revenue.
What is Prelisting of cash receipts?
Pre-listing cash receipt: It is a list that records the transaction that does not include sales, cash, and accounts receivable. This list helps the company in the verification of cash deposits in the bank with the accounting records of the company.
How many types of ledger are there?
three types