ACCT 3222 Test 4 Questions with Correct
Answers
1. Which of the following risks is addressed by preparing periodic independent bank
reconciliations?
A. Errors being made in journalizing cash receipts
B. Receipts being posted to the wrong customer account
C. Cash sales may not be recorded.
D. Cash not being deposited intact daily
A. Errors being made in journalizing cash receipts
1. What is a remittance advice?
A. A document prepared by the bank showing the details of electronic funds transfers
received by the bank from customers
B. A receipt from the bank showing the total amount deposited to the client's account at
the bank
C. A document received from the customer showing the details of payments made by
the customer
D. A daily report showing cash recorded in the cash receipts journal identifying
customers making payments on account and the amounts received
C. A document received from the customer showing the details of payments made by the
customer
1. Which of the following is a receipt from the bank showing the total amount deposited
to the client's account at the bank?
A. Remittance advice
B. Remittance report from the bank
,C. Monthly statements of receivable balances
D. Bank deposit slip
D. Bank deposit slip
1. As a control for cash receipts, which assertion is addressed when the computer starts
with the population of daily cash receipts recorded in the daily remittance report (or
cash receipts journal) and develops a one for one match with the underlying bank
remittance report
A. Accuracy
B. Classification
C. Occurrence
D. Completeness
C. Occurrence
1. Which of the following is a control for the completeness (of cash receipts assertion)?
A. The computer compares each item on the underlying information in the bank
remittance report to develop a one for one match with recorded cash receipts in the
daily remittance report.
B. The computer starts with the population of daily cash receipts recorded in the daily
remittance report and develops a one for one match with the underlying bank
remittance report.
C. The computer starts with the population of daily cash receipts recorded in the daily
remittance report and it compares the dollar amount of each recorded cash receipt with
the underlying bank remittance report.
D. The computer starts with the population of daily cash receipts recorded in the daily
, remittance report and compares the date recorded in the daily remittance report with
the date received and deposited by the bank.
A. The computer compares each item on the underlying information in the bank remittance
report to develop a one for one match with recorded cash receipts in the daily remittance
report.
1. Control activities useful in reducing the risk of fraud focus on establishing the
validity and occurrence of such transactions and include ________.
A. a portion of sales returns should be authorized by sales management
B. all sales returns should be authorized by sales management
C. the computer should match the debit memo information with the sales order
D. ensuring top management approves all credit memos before agreeing to a reduction
in accounts receivable
B. all sales returns should be authorized by sales management
1. Which of the following serves as the basis for initiating the sales return and internal
processing of the customer return by the seller?
A. Cash receipts journal
B. Sales return authorization
C. Credit memo
D. Receiving report
B. Sales return authorization
1. The auditor often makes inquiries of personnel responsible for clearing exceptions
________.
A. to determine that all exceptions have been automatically approved
B. to ensure that no employees that handle exception reports are lapping
Answers
1. Which of the following risks is addressed by preparing periodic independent bank
reconciliations?
A. Errors being made in journalizing cash receipts
B. Receipts being posted to the wrong customer account
C. Cash sales may not be recorded.
D. Cash not being deposited intact daily
A. Errors being made in journalizing cash receipts
1. What is a remittance advice?
A. A document prepared by the bank showing the details of electronic funds transfers
received by the bank from customers
B. A receipt from the bank showing the total amount deposited to the client's account at
the bank
C. A document received from the customer showing the details of payments made by
the customer
D. A daily report showing cash recorded in the cash receipts journal identifying
customers making payments on account and the amounts received
C. A document received from the customer showing the details of payments made by the
customer
1. Which of the following is a receipt from the bank showing the total amount deposited
to the client's account at the bank?
A. Remittance advice
B. Remittance report from the bank
,C. Monthly statements of receivable balances
D. Bank deposit slip
D. Bank deposit slip
1. As a control for cash receipts, which assertion is addressed when the computer starts
with the population of daily cash receipts recorded in the daily remittance report (or
cash receipts journal) and develops a one for one match with the underlying bank
remittance report
A. Accuracy
B. Classification
C. Occurrence
D. Completeness
C. Occurrence
1. Which of the following is a control for the completeness (of cash receipts assertion)?
A. The computer compares each item on the underlying information in the bank
remittance report to develop a one for one match with recorded cash receipts in the
daily remittance report.
B. The computer starts with the population of daily cash receipts recorded in the daily
remittance report and develops a one for one match with the underlying bank
remittance report.
C. The computer starts with the population of daily cash receipts recorded in the daily
remittance report and it compares the dollar amount of each recorded cash receipt with
the underlying bank remittance report.
D. The computer starts with the population of daily cash receipts recorded in the daily
, remittance report and compares the date recorded in the daily remittance report with
the date received and deposited by the bank.
A. The computer compares each item on the underlying information in the bank remittance
report to develop a one for one match with recorded cash receipts in the daily remittance
report.
1. Control activities useful in reducing the risk of fraud focus on establishing the
validity and occurrence of such transactions and include ________.
A. a portion of sales returns should be authorized by sales management
B. all sales returns should be authorized by sales management
C. the computer should match the debit memo information with the sales order
D. ensuring top management approves all credit memos before agreeing to a reduction
in accounts receivable
B. all sales returns should be authorized by sales management
1. Which of the following serves as the basis for initiating the sales return and internal
processing of the customer return by the seller?
A. Cash receipts journal
B. Sales return authorization
C. Credit memo
D. Receiving report
B. Sales return authorization
1. The auditor often makes inquiries of personnel responsible for clearing exceptions
________.
A. to determine that all exceptions have been automatically approved
B. to ensure that no employees that handle exception reports are lapping
