BMGT 422 FINAL EXAM QUESTIONS
WITH ALL ANSWERS VERIFIED
Sales and collection cycle: Auditors sometimes use the comparison of ratios as
audit evidence. For example, an unexplained decrease in the ratio of gross profit
to sales may suggest which of the following possibilities?
a) Unrecorded acquisitions.
b) Unrecorded sales.
c) Merchandise acquisitions being charged to selling and general expense.
d) Fictitious sales
b
Sales and collection cycle: An auditor is performing substantive tests of
transactions for sales. One step is to trace a sample of debitentries from the
accounts receivable master file back to the supporting duplicate sales invoices.
What will the auditor intend to establish by this step?
a) Sales invoices represent existing sales.
b) All sales have been recorded.
c) All sales invoices have been correctly posted to customer accounts.
d) Debit entries in the accounts receivable master file are correctly supported by
sales invoices
d
Sales and collection cycle: To verify that all sales transactions have been
recorded, a substantive test of transactions should be completed on a
representative sample drawn from
, a) entries in the sales journal.
b) the billing clerk's file of sales orders.
c) a file of duplicate copies of sales invoices for which all pre numbered forms
in the series have been accounted.
d) the shipping clerk's file of duplicate copies of bills of lading.
d
Sales and collection cycle: Which audit procedure is most effective in testing
credit sales for overstatement?
a) Trace a sample of postings from the sales journal to the sales account in the
general ledger.
b) Vouch a sample of recorded sales from the sales journal to shipping
documents.
c) Prepare an aging of accounts receivable.
d) Trace a sample of initial sales orders to sales recorded in the sales journal.
b
Sales and collection cycle: Proper authorization of write-offs of uncollectible
accounts should be approved in which of the following departments?
a) Accounts receivable.
b) Credit.
c) Accounts payable.
d) Chief financial office
d
Inventory and Warehouse Cylce: To determine whether the internal controls
operated effectively to minimize instances of failure to post invoices to
customers' accounts receivable master file, the auditor would select a sample of
transactions from the population represented by the
a) Customer order file
b) Bill of lading file
WITH ALL ANSWERS VERIFIED
Sales and collection cycle: Auditors sometimes use the comparison of ratios as
audit evidence. For example, an unexplained decrease in the ratio of gross profit
to sales may suggest which of the following possibilities?
a) Unrecorded acquisitions.
b) Unrecorded sales.
c) Merchandise acquisitions being charged to selling and general expense.
d) Fictitious sales
b
Sales and collection cycle: An auditor is performing substantive tests of
transactions for sales. One step is to trace a sample of debitentries from the
accounts receivable master file back to the supporting duplicate sales invoices.
What will the auditor intend to establish by this step?
a) Sales invoices represent existing sales.
b) All sales have been recorded.
c) All sales invoices have been correctly posted to customer accounts.
d) Debit entries in the accounts receivable master file are correctly supported by
sales invoices
d
Sales and collection cycle: To verify that all sales transactions have been
recorded, a substantive test of transactions should be completed on a
representative sample drawn from
, a) entries in the sales journal.
b) the billing clerk's file of sales orders.
c) a file of duplicate copies of sales invoices for which all pre numbered forms
in the series have been accounted.
d) the shipping clerk's file of duplicate copies of bills of lading.
d
Sales and collection cycle: Which audit procedure is most effective in testing
credit sales for overstatement?
a) Trace a sample of postings from the sales journal to the sales account in the
general ledger.
b) Vouch a sample of recorded sales from the sales journal to shipping
documents.
c) Prepare an aging of accounts receivable.
d) Trace a sample of initial sales orders to sales recorded in the sales journal.
b
Sales and collection cycle: Proper authorization of write-offs of uncollectible
accounts should be approved in which of the following departments?
a) Accounts receivable.
b) Credit.
c) Accounts payable.
d) Chief financial office
d
Inventory and Warehouse Cylce: To determine whether the internal controls
operated effectively to minimize instances of failure to post invoices to
customers' accounts receivable master file, the auditor would select a sample of
transactions from the population represented by the
a) Customer order file
b) Bill of lading file
