1|Page
Gleim’s CPA Test Prep Auditing Complete 100
Questions And Correct Detailed Answers (Verified
Answers) |Already Graded A+
For effective internal control, employees maintaining the
accounts receivable subsidiary ledger should not also approve
A. Employee overtime wages.
B. Write-offs of customer accounts.
C. Credit granted to customers.
D. Cash disbursements.
B
To conceal defalcations involving receivables, the auditor would
expect an experienced bookkeeper to charge which of the
following accounts?
A. Sales returns.
B. Petty cash.
C. Miscellaneous expense.
D. Miscellaneous income.
A
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To safeguard the assets through effective internal control,
accounts receivable that are written off should be transferred to
A. A separate ledger.
B. An attorney for evidence in collection proceedings.
C. A tax deductions file.
D. A credit manager, since customers may seek to reestablish
credit by paying.
A
We have an expert-written solution to this problem!
Sound internal control activities dictate that defective
merchandise returned by customers be presented initially to the
A. Shipping department supervisor.
B. Receiving clerk.
C. Sales clerk.
D. Accounts receivable supervisor.
B
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We have an expert-written solution to this problem!
The primary audit objective regarding the purchasing of
materials by the client is to
A. Ascertain that materials paid for are on hand.
B. Investigate the recording of unusual transactions regarding
materials.
C. Observe the annual physical count.
D. Determine the reliability of financial reporting by the
purchasing function.
D
To minimize the risk that agents in the purchasing department
will use their positions for personal gain, the organization should
A. Request internal auditors to confirm selected purchases and
accounts payable.
B. Specify that all items purchased must pass value-per-unit-of-
cost reviews.
C. Direct the purchasing department to maintain records on
purchase prices paid, with review of such records required every
6 months.
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D. Require competitive bidding.
D
In a well-designed internal control system, employees in the
same department most likely would approve purchase orders,
and also
A. Inspect goods upon receipt.
B. Authorize requisitions of goods.
C. Reconcile the open invoice file.
D. Negotiate terms with vendors.
D
A university does not have a centralized receiving function for
departmental purchases of books, supplies, and equipment.
Which of the following controls will most effectively prevent
payment for goods not received, if performed prior to invoice
payment?
A. Names and addresses on vendor invoices should be compared
to a list of department-authorized vendors.
Gleim’s CPA Test Prep Auditing Complete 100
Questions And Correct Detailed Answers (Verified
Answers) |Already Graded A+
For effective internal control, employees maintaining the
accounts receivable subsidiary ledger should not also approve
A. Employee overtime wages.
B. Write-offs of customer accounts.
C. Credit granted to customers.
D. Cash disbursements.
B
To conceal defalcations involving receivables, the auditor would
expect an experienced bookkeeper to charge which of the
following accounts?
A. Sales returns.
B. Petty cash.
C. Miscellaneous expense.
D. Miscellaneous income.
A
,2|Page
To safeguard the assets through effective internal control,
accounts receivable that are written off should be transferred to
A. A separate ledger.
B. An attorney for evidence in collection proceedings.
C. A tax deductions file.
D. A credit manager, since customers may seek to reestablish
credit by paying.
A
We have an expert-written solution to this problem!
Sound internal control activities dictate that defective
merchandise returned by customers be presented initially to the
A. Shipping department supervisor.
B. Receiving clerk.
C. Sales clerk.
D. Accounts receivable supervisor.
B
,3|Page
We have an expert-written solution to this problem!
The primary audit objective regarding the purchasing of
materials by the client is to
A. Ascertain that materials paid for are on hand.
B. Investigate the recording of unusual transactions regarding
materials.
C. Observe the annual physical count.
D. Determine the reliability of financial reporting by the
purchasing function.
D
To minimize the risk that agents in the purchasing department
will use their positions for personal gain, the organization should
A. Request internal auditors to confirm selected purchases and
accounts payable.
B. Specify that all items purchased must pass value-per-unit-of-
cost reviews.
C. Direct the purchasing department to maintain records on
purchase prices paid, with review of such records required every
6 months.
, 4|Page
D. Require competitive bidding.
D
In a well-designed internal control system, employees in the
same department most likely would approve purchase orders,
and also
A. Inspect goods upon receipt.
B. Authorize requisitions of goods.
C. Reconcile the open invoice file.
D. Negotiate terms with vendors.
D
A university does not have a centralized receiving function for
departmental purchases of books, supplies, and equipment.
Which of the following controls will most effectively prevent
payment for goods not received, if performed prior to invoice
payment?
A. Names and addresses on vendor invoices should be compared
to a list of department-authorized vendors.
