ACC 403 Final Exam 2 Chp. 14-17 & 21&24

ACC 403 Final Exam 2 Chp. 14-17 & 21&24

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1.       What critical event must take place before goods can be shipped in order to assure payment can be reasonably expected?

2.       When designing audit procedures, tracing of source documents to the customers subsidiary ledger and subsequently to the general ledger is done to satisfy what assertion?

3.       The audit procedure referred to as proof of cash receipts is particularly useful to test:

4.       When an employee who is authorized to make customer entries in the accounts receivable subsidiary ledger, purposefully enters cash received into the wrong customer's account that employee may be suspected of:

5.       A document sent to each customer showing his or her beginning accounts receivable balance and the amount and date of each sale, cash payment received, any debit or credit memo issued, and the ending balance is the:

6.       One of the causes of nonsampling risk is:

7.       A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:

8.       To determine if a sample is truly representative of the population, an auditor would be required to:

9.       When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use:

10.   Which of the following would have the least impact in determining sample size?

11.   When do most companies record sales returns and allowances?

12.   Analytical procedures:

13.   The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:

14.   Most tests of accounts receivable are based on what schedule, file, or listing?

15.   The two primary classes of transactions in the sales and collection cycle are:

16.   The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:

17.   The method used to measure the estimated total error amount in a population when there is both a recorded value and an audited value for each item in the sample is:

18.   The auditor is concerned with the audited value rather than the error amount of each item in the sample when using:

19.   The allowance for sampling risk when no misstatements are found in the sample is:

20.   The most commonly used method of statistical sampling for tests of details of balances is:

21.   Which of the following is a significant audit concern related to the transfer of inventory from one location to another?

22.   A major difficulty in the verification of inventory cost records for the purpose of inventory valuation is in determining the reasonableness of the:

23.   In most manufacturing companies, the inventory and warehousing cycle begins with the:

24.   When determining the sample size for the number of items the auditor should count during the physical inventory:

25.   The inventory and warehousing cycle can be thought of as having two separate but closely related systems, one involving the actual physical flow of goods, and the other the:

26.   The standard letter of inquiry to the client's legal counsel should be prepared on:

27.   Auditing standards require the auditor to communicate all management frauds and illegal acts to the audit committee:

28.   A client representation letter is:

29.   At the completion of the audit, management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities. This statement would appear in the:

30.   Which of the following subsequent events is most likely to result in an adjustment to a company's financial statements?

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