acct 241 ch 8

  1. A "voucher" is a

    D. none of the above
  2. A "blind purchase order" is a

    A. purchase order with the quantity deleted to be used as a receiving report
  3. Which of the following accounts is not included in the acquisition and expenditure cycle?

    B. sales returns and allowance
  4. Canceling invoices with a "paid" stamp after payment is a control that relates to which assertion?

    D. existence or occurance
  5. Which of the following is not a steop in the search for unrecorded liabilities?

    B. examine disbursements for the period immediately before the end of the period
  6. Which of the following fraud signs could be detected by CAAT?

    D. all of the above
  7. Which of the following control questions relates to the existence and occurrence objective in purchasing and accounts payable?

    B. are recieving reports prepared for each item received?
  8. Auditors usually focus on which assertion when auditing current liabilities?

    D. completeness
  9. If goods ordered under a binding purchase commitment permanently decline in value below the agreed on purchase prices, a company should.

    C. record a loss for items not yet received
  10. The purchasing department

    A. should obtain competive bids from vendors
  11. Which of the following would not overstate current period net income?

    C. failing to record a check paying an item in Vouchers Payable
  12. A client's purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes the auditor's primary concern with respect to liabilities resulting from the purchasing system?

    C. accounts payable are not materially understated
  13. Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?

    C. the official signing the check should compare the check with the voucher and should stamp "paid" on the vourcher documents
  14. Budd, the purchasing agent of Lake Hardware Wholesalers, has a relative who owns a retail hardware store. Budd arranged for hardware to be delivered by manufacturers to the retail store on a COD basis, thereby enabling his relative to buy at Lake's wholesale prices. Budd was probably able to accomplish this because of Lake's poor internal control over:

    A. purchase orders
  15. Which of the following is the best audit procedure for determining the existence of unrecorded liabilities?

    C. examine a sample of cash disbursements in the period subsequent to year-end
  16. Which of the following procedures is least likely to be performed before the balance sheet date?

    B. search for unrecorded liabilities
  17. To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population for this test consists of all:

    C. receiving reports
  18. When verifying debits to the perpetual inventory records of a non-manufacturing company, an auditor would be most interested in examining a sample of purhcase:

    D. invoices
  19. In auditing accounts payable, an auditor's procedures most likely would focus primarily on management's assertion of:

    B. completeness
  20. Before expressing an opinion concerning the auditor of income and expenses, the auditor would best proceed with the audit of the income statement by:

    B. auditing income statement accounts concurrently withthe related balance sheet accounts
Card Set
acct 241 ch 8
acct 241 ch 8