Exam 7: Revenue and Collection Cycle

Confirmations yield evidence about existence and the gross valuation of a receivable balance.

Write-offs of doubtful accounts should be approved by

Accountants should be under orders to record sales and accounts receivable when

In evaluating the adequacy of the allowance for doubtful accounts,an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of

Auditing the details of customer payments listed in bank deposits in comparison to details of customer payment postings can detect _________________________________.

The use of confirmations to test accounts receivable is considered a generally accepted audit procedure.

Internal control assessment is important because it governs the ________________________________,_________________________________ and _________________________________ of substantive procedures.

An internal control questionnaire for evaluating the occurrence objective of revenues would not include which of the following questions?

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

The pending sales orders can be reviewed for evidence of the _________________________________ of recorded _________________________________ and ________________________________.

The document that generates recording of a sale is the

In tests of controls auditing,auditors need to define "deviations" in advance.Give seven examples of control compliance deviations related to a client's processing of credit sales transactions and the related assertion that was violated.

A computer generally cannot be used for scanning large files of accounts receivable for unusual credit balances.

Inquiries of management usually do not provide very convincing evidence about the existence and rights assertions.

Which of the following would be the best protection for a company that wishes to prevent the "lapping" of trade accounts receivable?

The assertion that auditors will probably emphasize in the revenue and collection cycle is

Which of the following is the best reason for prenumbering in sequence such documents as sales orders,shipping documents,and sales invoices?

Dual direction testing involves samples of transactions selected to obtain evidence about control over _________________________________ in one direction and control over _________________________________ in the other direction.

Which of the following responses to a confirmation of balances at December 31 would be most troubling to an auditor?

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