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Study Set
Principles of Auditing Study Set 1
Quiz 11: Accounts Receivable, Notes Receivable, and Revenue
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Question 41
Multiple Choice
Once a CPA has determined that accounts receivable have increased due to slow collections in a "tight money" environment, the CPA would be likely to:
Question 42
Multiple Choice
The audit working papers often include a client-prepared, aged trial balance of accounts receivable as of the balance sheet date. This aging is best used by the auditors to:
Question 43
Multiple Choice
The auditors obtain audit evidence for accounts receivable by using positive or negative confirmation requests. Under which of the following circumstances might the negative form of the accounts receivable confirmation be useful?
Question 44
Multiple Choice
The individual looking for guidance on revenue recognition is most likely to appropriately review:
Question 45
Multiple Choice
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:
Question 46
Multiple Choice
The confirmation process may be performed using a(n) :
Paper form
Electronic form
A.
Yes
Yes
B.
Yes
No
C.
No
Yes
D.
No
No
\begin{array} { | l c | c | } \hline &{ \text { Paper form } } & \text { Electronic form } \\\hline \text { A. } & \text { Yes } & \text { Yes } \\\hline \text { B. } & \text { Yes } & \text { No } \\\hline \text { C. } & \text { No } & \text { Yes } \\\hline \text { D. } & \text { No } & \text { No } \\\hline\end{array}
A.
B.
C.
D.
Paper form
Yes
Yes
No
No
Electronic form
Yes
No
Yes
No
Question 47
Multiple Choice
Which of the following is the best argument against the use of negative accounts receivable confirmation requests?
Question 48
Multiple Choice
An auditor discovered that a client's accounts receivable turnover is substantially lower for the current year than for the prior year. This may indicate that:
Question 49
Multiple Choice
Which of the following sets of duties would ordinarily be considered basically incompatible in terms of good internal control?
Question 50
Multiple Choice
Which of the following is not a primary objective of the auditors in the examination of accounts receivable?
Question 51
Multiple Choice
Tracing copies of sales invoices to shipping documents will provide evidence that all:
Question 52
Multiple Choice
Which of the following revenue related transactions is not linked to the accounts indicated?
Question 53
Multiple Choice
Auditors may use positive and/or negative forms of confirmation requests for accounts receivable. Of the following, which combination is it most likely that the auditors will use?
Question 54
Multiple Choice
Which of the following is not one of the criteria for revenue recognition?
Question 55
Multiple Choice
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:
Question 56
Multiple Choice
When scheduling the audit work to be performed on an engagement, the auditors should consider confirming accounts receivable balances at an interim date if:
Question 57
Multiple Choice
It is sometimes impossible for the auditors to use normal accounts receivable confirmation procedures. In such situations, the best alternative procedure the auditors might resort to would be: