Exam 11: Accounts Receivable, Notes Receivable, and Revenue

Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal controls in the revenue cycle?

Which of the following generally provides the least evidence regarding the valuation of the allowance for doubtful accounts?

Which of the following fraudulent activities most likely could be perpetrated due to the lack of effective internal control over the revenue cycle?

An auditor should perform alternative procedures to substantiate the existence of accounts receivable when:

When scheduling the audit work to be performed on an engagement, the auditors should consider confirming accounts receivable balances at an interim date if:

Which of the following is not one of the criteria for revenue recognition?

Confirmation requests should contain a "business reply" envelope addressed to the auditors at the client's address.

Recognizing a loan received as revenue instead of as a liability has a positive effect on the reported financial statements for all of the following except:

The confirmation of accounts receivable is most closely associated with:

Which of the following is consistent with effective internal control over sales transactions?

When there are a large number of relatively small account receivable balances, negative confirmation requests may be appropriate if the combination of inherent risk and control risk is:

The individual looking for guidance on revenue recognition is most likely to appropriately review:

Which of the following revenue related transactions is not linked to the accounts indicated?

Which of the following is a likely procedure to test the adequacy of the allowance for doubtful accounts?

Which of the following is least likely to be typically considered to be an alternate procedure for handling nonreplies to accounts receivable confirmation requests?

A CPA examines a sample of copies of December and January sales invoices for the initials of the person who verified the quantitative data. This is an example of a:

Which of the following is most likely to be used in determining a proper amount to be included in the allowance for doubtful accounts?

Which of the following is the best argument against the use of negative accounts receivable confirmation requests?

For effective internal control, the billing function should not be performed by the:

An audit basically consists of having the auditor form an opinion regarding management's financial statement assertions. The auditor therefore develops general and specific procedures to apply to the accounts and transactions. In a particular case, s/he might do this by: