Exam 13: Completing tests in the sales and collection cycle: Accounts receivable

A listing of the balances in the accounts receivable master file at the balance sheet date, by total balance outstanding and by the time the component parts have been outstanding, is the:

In the sales and collection cycle, the results of the tests of controls determine:

A client's failure to record a credit note could result from:

Discuss the advantages and disadvantages of using negative accounts receivable confirmations rather than positive confirmations.

Recording a cash receipt that did NOT occur violates the existence transaction-related audit objective for the sales and collections cycle.Which balance-related audit objective for accounts receivable does it violate?

Design and perform analytical procedures for accounts receivable balance is part of which phase of the audit?

Describe the differences between positive and negative confirmation.Which type is more reliable?

Tests of details of balances focus on:

The use of the positive (as opposed to the negative)form of receivables confirmation is preferred when:

The following audit procedure tests primarily which balance-related audit objective for accounts receivable: review accounts receivable trial balance for large and unusual receivables.

Which one of the following types of receivables would NOT require special attention from the auditor?

The auditor may consider it unnecessary to confirm accounts receivable response rates from the confirmations that are likely to be unreliable.

When positive confirmations have been used, it is normally desirable to account for unconfirmed balances with alternative procedures:

Cutoff misstatements exist when subsequent period transactions are recorded in the current period.

The following audit procedure tests primarily which balance-related audit objective for accounts receivable: confirm accounts receivable, using positive confirmations.

You are reviewing sales to discover cutoff problems.If the client's policy is to record sales when title to the merchandise passes to the buyer, then the books and records would contain errors if the December 31 entries were for sales recorded:

When positive confirmations are used, ASA 505 requires follow-up procedures for confirmations not returned by the customer.In such a situation, which of the following would NOT be classified as an alternative procedure?

Client business risks affecting accounts receivable are considered in the auditor's evaluation of inherent risk.

If accounts receivable accounts with credit balances are significant, they should be:

Explain whether it is equally as important to test the cutoff for sales and cash receipts.