ACC 403 Quiz 8 Chapters 16-17

ACC 403 Quiz 8 Chapters 16-17

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

2.       Which of the following is the principle "weakness" of using negative confirmations for your tests of details of balances for accounts receivable?

3.       If the client's internal control for recording sales returns and allowances is evaluated as ineffective:

4.       The net realizable value of accounts receivable is equal to:

5.       Which of the following audit procedure would normally be included in the audit plan when auditing the allowance for doubtful accounts?

6.       For most audits, a proper cash receipts cutoff is less important than the sales cutoff because the improper cutoff of cash:

7.       A positive confirmation is more reliable evidence than a negative confirmation because:

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

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

10.   An auditor is performing a credit analysis of customers with balances over 60 days due. She is most likely obtaining evidence for which audit related objective?

11.   Which of the following is likely to be determined first when performing tests of details for accounts receivable?

12.   For cash receipts, the occurrence transaction-related audit objective affects which of the following balance-related audit objective?

13.   The most effective audit evidence gathered for accounts receivable is the:

14.   Confirmation of accounts receivable selected from the trial balance is the most common test of details of balances for the ________ of accounts receivable.

15.   Communication addressed to the debtor requesting him or her to confirm whether the balance as stated on the communication is correct or incorrect is a:

16.   The risk the auditor is willing to take of accepting a balance as correct when the true misstatement in the balance under audit is greater than the tolerable misstatement is:

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

18.   The client's trial balance has a balance of $410,000 for merchandise inventory. As the auditor you are willing to accept a balance that is within $20,000 of either side of the recorded balance. You compute a 95% confidence interval of $395,000 to $425,000. You could therefore:

19.   One of the steps involved in planning the sample for the tests of details of balances is to:

20.   You are auditing Nelson and Company and determined that the sample results support a conclusion that the account is materially misstated, when in fact it was not misstated. This illustrates the risk of:

21.   In monetary unit sampling, a sampling interval of 900 means that:

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

23.   If the population is not considered acceptable, one step the auditor is likely to take is to:

24.   The word below that best explains the relationship between required sample size and the acceptable risk of incorrect acceptance is:

25.   As the amount of misstatements expected in the population approaches tolerable misstatement, the planned sample size will:

26.   If an auditor concludes that internal controls are likely to be effective, the preliminary assessment of control risk can be reduced, leading to which of the following impacts on the acceptable risk of incorrect acceptance?

27.   When errors are found in a sample, auditors in practice generally make the assumption:

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

29.   Monetary unit sampling is not particularly effective at detecting:

30.   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:

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