Page |1
GLEIM’S CPA TEST PREP AUDITING 2025/2026 NEWEST
ACTUAL EXAM WITH COMPLETE QUESTIONS AND
VERIFIED ANSWERS |ALREADY GRADED A+|
An audit client sells 15 to 20 units of product annually. A large
portion of the annual sales occur in the last month of the fiscal
year. Annual sales have not materially changed over the past 5
years. Which of the following approaches would be most effective
concerning the timing of audit procedures for revenue?
A. The auditor should perform analytical procedures at an interim
date and discuss any changes in the level of sales with senior
management.
B. The auditor should inspect transactions occurring in the last
month of the fiscal year and review the related sale contracts to
determine that revenue was posted in the proper period.
C. The auditor should perform tests of controls at an interim date
to obtain audit evidence about the operational effectiveness of
internal controls over sales.
D. The auditor should review period-end compensation to
determine if bonuses were paid to meet earnings goals. -
ANSWER-B
, Page |2
A CPA is engaged in the annual audit of a calendar year client.
The client took a complete physical inventory under the CPA's
observation on December 15 and adjusted its inventory account
and detailed perpetual inventory records to agree with the
physical inventory. The client considers a sale to be made in the
period that goods are shipped. Listed below are four items taken
from the CPA's sales cutoff test worksheet. Which item does not
require an adjusting entry on the client's books?
Shipped/Recorded as Sale/Credited to Inventory
A. 1/2, 12/31, 12/31
B. 12/31, 1/2, 12/31
C. 12/14, 12/16, 12/16
D. 12/10, 12/19, 12/12 - ANSWER-D
The auditor finds a situation in which one person has the ability to
collect receivables, make deposits, issue credit memos, and
record receipt of payments. The auditor suspects the individual
may be stealing from cash receipts. Which of the following audit
procedures will be most effective in discovering fraud in this
scenario?
, Page |3
A. Send positive confirmations to a random selection of
customers.
B. Send negative confirmations to all outstanding accounts
receivable customers.
C. Perform a detailed review of debits to customer discounts,
sales returns, or other debit accounts, excluding cash posted to
the cash receipts journal.
D. Take a sample of bank deposits and trace the detail in each
bank deposit back to the entry in the cash receipts journal. -
ANSWER-C
In the audit of which of the following general ledger accounts will
tests of controls be particularly appropriate?
A. Equipment.
B. Bonds payable.
C. Bank charges.
D. Sales. - ANSWER-D
A large university has relatively ineffective internal control. The
university's auditor seeks assurance that all tuition revenue has
, Page |4
been recorded. The auditor could best obtain the desired
assurance by
A. Confirming a sample of tuition payments with the students.
B. Observing tuition payment procedures on a surprise basis.
C. Comparing business office revenue records with registrar's
office records of students enrolled.
D. Preparing a year-end bank reconciliation. - ANSWER-C
If the objective of an auditor's test of details is to detect a possible
understatement of sales, the auditor most likely would trace
transactions from the
A. Sales invoices to the shipping documents.
B. Cash receipts journal to the sales journal.
C. Shipping documents to the sales invoices.
D. Sales journal to the cash receipts journal. - ANSWER-C
A CPA auditing an electric utility wishes to determine whether all
customers are being billed. The CPA's best direction of test is
from the
A. Meter department records to the billing (sales) register.
GLEIM’S CPA TEST PREP AUDITING 2025/2026 NEWEST
ACTUAL EXAM WITH COMPLETE QUESTIONS AND
VERIFIED ANSWERS |ALREADY GRADED A+|
An audit client sells 15 to 20 units of product annually. A large
portion of the annual sales occur in the last month of the fiscal
year. Annual sales have not materially changed over the past 5
years. Which of the following approaches would be most effective
concerning the timing of audit procedures for revenue?
A. The auditor should perform analytical procedures at an interim
date and discuss any changes in the level of sales with senior
management.
B. The auditor should inspect transactions occurring in the last
month of the fiscal year and review the related sale contracts to
determine that revenue was posted in the proper period.
C. The auditor should perform tests of controls at an interim date
to obtain audit evidence about the operational effectiveness of
internal controls over sales.
D. The auditor should review period-end compensation to
determine if bonuses were paid to meet earnings goals. -
ANSWER-B
, Page |2
A CPA is engaged in the annual audit of a calendar year client.
The client took a complete physical inventory under the CPA's
observation on December 15 and adjusted its inventory account
and detailed perpetual inventory records to agree with the
physical inventory. The client considers a sale to be made in the
period that goods are shipped. Listed below are four items taken
from the CPA's sales cutoff test worksheet. Which item does not
require an adjusting entry on the client's books?
Shipped/Recorded as Sale/Credited to Inventory
A. 1/2, 12/31, 12/31
B. 12/31, 1/2, 12/31
C. 12/14, 12/16, 12/16
D. 12/10, 12/19, 12/12 - ANSWER-D
The auditor finds a situation in which one person has the ability to
collect receivables, make deposits, issue credit memos, and
record receipt of payments. The auditor suspects the individual
may be stealing from cash receipts. Which of the following audit
procedures will be most effective in discovering fraud in this
scenario?
, Page |3
A. Send positive confirmations to a random selection of
customers.
B. Send negative confirmations to all outstanding accounts
receivable customers.
C. Perform a detailed review of debits to customer discounts,
sales returns, or other debit accounts, excluding cash posted to
the cash receipts journal.
D. Take a sample of bank deposits and trace the detail in each
bank deposit back to the entry in the cash receipts journal. -
ANSWER-C
In the audit of which of the following general ledger accounts will
tests of controls be particularly appropriate?
A. Equipment.
B. Bonds payable.
C. Bank charges.
D. Sales. - ANSWER-D
A large university has relatively ineffective internal control. The
university's auditor seeks assurance that all tuition revenue has
, Page |4
been recorded. The auditor could best obtain the desired
assurance by
A. Confirming a sample of tuition payments with the students.
B. Observing tuition payment procedures on a surprise basis.
C. Comparing business office revenue records with registrar's
office records of students enrolled.
D. Preparing a year-end bank reconciliation. - ANSWER-C
If the objective of an auditor's test of details is to detect a possible
understatement of sales, the auditor most likely would trace
transactions from the
A. Sales invoices to the shipping documents.
B. Cash receipts journal to the sales journal.
C. Shipping documents to the sales invoices.
D. Sales journal to the cash receipts journal. - ANSWER-C
A CPA auditing an electric utility wishes to determine whether all
customers are being billed. The CPA's best direction of test is
from the
A. Meter department records to the billing (sales) register.
