AUDIT 4100 EXAM #3 STUDY GUIDE 2026
PRACTICE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED RATIONALES
AUDITING, A/R, REVENUE AND A/P A+
EXAM PREPARATION
Inquiries of warehouse personnel concerning possible obsolete or slow-
moving inventory items provide assurance about management's assertion
of....
a. Completeness.
b. Existence.
c. Presentation.
d. Valuation. - CORRECT ANSWER-d. (Valuation.)
In testing plant and equipment balances, an auditor may inspect new
additions listed on the analysis of plant and equipment. This procedure is
designed to obtain evidence concerning management's assertions of....
Existence - Understandability and classification
a. Yes Yes
b. Yes No
c. No Yes
,d. No No - CORRECT ANSWER-b. (Yes No)
Which of the following explanations most likely would satisfy an auditor
who questions management about significant debit to the accumulated
depreciation accounts?
a. The estimated remaining useful lives of plant assets were revised upward.
b. Plant assets were retired during the year.
c. The prior year's depreciation expense was erroneously understated.
d. Overhead allocations were revised at year-end. - CORRECT ANSWER-b.
(Plant assets were retired during the year.)
An auditor vouched data for a sample of employees in a payroll register to
approved clock card data to provide assurance that....
a. Payments to employees are computed at authorized rates.
b. Employees work the number of hours for which they are paid.
c. Segregation of duties exists between the preparation and distribution of
the payroll.
d. Internal controls relating to unclaimed payroll checks are operating
effectively. - CORRECT ANSWER-b. (Employees are computed at
authorized rates.)
An auditor analyzes repairs and maintenance accounts primarily to obtain
evidence in support of the audit assertion that all....
, a. Noncapitalizable expenditures for repairs and maintenance have been
recorded in the proper period.
b. Expenditures for property and equipment have been recorded in the
proper period.
c. Noncapitalizable expenditures for repairs and maintenance have been
properly charged to expense.
d. Expenditures for property and equipment have not been charged to
expense. - CORRECT ANSWER-d. (Expenditures for property and
equipment have not been charged to expense.)
An auditor's purpose in reviewing the renewal of a note payable shortly
after the balance sheet date most likely is to obtain evidence concerning
management's assertions about....
a. Occurence.
b. Understandability and classification.
c. Completeness.
d. Valuation and accuracy. - CORRECT ANSWER-b. (Understandability
and classification.)
In testing plant and equipment balances, an auditor examines new
additions listed on an analysis of plant and equipment. This procedure
most likely obtains evidence concerning management's assertion of....
a. Completeness.
b. Existence.
c. Understandability and classification.
PRACTICE QUESTIONS AND CORRECT
ANSWERS WITH DETAILED RATIONALES
AUDITING, A/R, REVENUE AND A/P A+
EXAM PREPARATION
Inquiries of warehouse personnel concerning possible obsolete or slow-
moving inventory items provide assurance about management's assertion
of....
a. Completeness.
b. Existence.
c. Presentation.
d. Valuation. - CORRECT ANSWER-d. (Valuation.)
In testing plant and equipment balances, an auditor may inspect new
additions listed on the analysis of plant and equipment. This procedure is
designed to obtain evidence concerning management's assertions of....
Existence - Understandability and classification
a. Yes Yes
b. Yes No
c. No Yes
,d. No No - CORRECT ANSWER-b. (Yes No)
Which of the following explanations most likely would satisfy an auditor
who questions management about significant debit to the accumulated
depreciation accounts?
a. The estimated remaining useful lives of plant assets were revised upward.
b. Plant assets were retired during the year.
c. The prior year's depreciation expense was erroneously understated.
d. Overhead allocations were revised at year-end. - CORRECT ANSWER-b.
(Plant assets were retired during the year.)
An auditor vouched data for a sample of employees in a payroll register to
approved clock card data to provide assurance that....
a. Payments to employees are computed at authorized rates.
b. Employees work the number of hours for which they are paid.
c. Segregation of duties exists between the preparation and distribution of
the payroll.
d. Internal controls relating to unclaimed payroll checks are operating
effectively. - CORRECT ANSWER-b. (Employees are computed at
authorized rates.)
An auditor analyzes repairs and maintenance accounts primarily to obtain
evidence in support of the audit assertion that all....
, a. Noncapitalizable expenditures for repairs and maintenance have been
recorded in the proper period.
b. Expenditures for property and equipment have been recorded in the
proper period.
c. Noncapitalizable expenditures for repairs and maintenance have been
properly charged to expense.
d. Expenditures for property and equipment have not been charged to
expense. - CORRECT ANSWER-d. (Expenditures for property and
equipment have not been charged to expense.)
An auditor's purpose in reviewing the renewal of a note payable shortly
after the balance sheet date most likely is to obtain evidence concerning
management's assertions about....
a. Occurence.
b. Understandability and classification.
c. Completeness.
d. Valuation and accuracy. - CORRECT ANSWER-b. (Understandability
and classification.)
In testing plant and equipment balances, an auditor examines new
additions listed on an analysis of plant and equipment. This procedure
most likely obtains evidence concerning management's assertion of....
a. Completeness.
b. Existence.
c. Understandability and classification.
