Exam 12: Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

For good internal control, the credit- granting function should be separate from the sales function.

Proper separation of duties is useful to prevent various types of misstatements. Which one of the following is NOT an essential separation of duties?

Which one of the following statements regarding the five types of audit tests in the sales and collection cycle is NOT correct?

State the five classes of transactions that comprise the sales and collection cycle.

Which one of the following internal control procedures would most likely prevent the concealment of a cash shortage resulting from the improper write- off of a trade account receivable?

A listing of the amount owed by each customer that shows how long each component part has been due is the:

Describe each of the six key control activities for sales.

The inclusion of invalid sales in the client's accounting records leads to an:

Which one of the following is NOT an auditor's concern about a key authorisation point in the sales/collection cycle?

It is common to test sales for proper classification as part of testing for:

There are five classes of transactions in the sales and collection cycle. Which is NOT one of them?

The listing or report generated from sales which includes the customer name, date, sales and GST amount, and whether the sale was for cash or accounts receivable, for all sales in a period is:

The document used to indicate to the customer the amount of a sale and payment due date is the:

Distinguish between bad debt expense (including the provision for doubtful debts) and the write- off of bad debts.

Which transaction and amount in sales and collections transactions is ultimately included in balance sheet accounts?

Which one of the following is NOT typically included in the sales and collection cycle?

Discuss the four business functions that result in sales transactions in a typical sales and collection cycle and, for each function, state the key documents and records involved.

Cash at bank, in the sales and collection cycle, will ultimately be affected by:

The document used as the basis for recording sales transactions and updating the accounts receivable master file is the:

Monthly statements should be mailed by the accounts clerk.