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5 Written questions

5 Matching questions

  1. A security owned by a company is from another company that recently declared bankruptcy. Which of the following is the auditor's primary concern with the investment? A-Existence B-Presentation C-Completeness D-Valuation
  2. A company owns a large amount of debt securities that pay interest twice a year - August 1 and February 1. On the financial statements the company accrued the 5 months of interest it was due as interest receivable. The auditor should: A-Require the accrual be reversed since the interest has not yet been paid. B-Confirm the interest accrual with the security issuer. C-Require the accrual be reversed since the company could sell the security before interest has been paid. D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment.
  3. Voucher register (387)
  4. Dividend record book (410)
  5. A local gas station has one clerk that accepts cash payments for gas and rings them up on the cash register. Which of the following would be the best control to provide assurance that the cashier isn't keeping some of the cash?A-Count all cash before and after the shift and compare it to cash register totals.B-Require that each customer be given a receipt of their purchase.C-Compare cash register totals to a total that is automatically generated by each gas pump.D-Require that each employees have a separate cash drawer that only they use.
  1. a C-Compare cash register totals to a total that is automatically generated by each gas pump.
  2. b D-Valuation
  3. c D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment.
  4. d ...
  5. e A reference book published monthly by investment advisory services reporting detailed information concerning all listed and many unlisted securities; includes dividend dates and amounts, current prices of securities, and other condensed financial data.

5 Multiple choice questions

  1. ...
  2. A notification sent by a stockbrokerage firm to a customer reporting the terms of a purchase or sale of securities.
  3. ...
  4. This act allows financial institutions to creat and process electronic "substitute checks" in place of customer written hard-copy checks. The purpose of this act is to drease the time for check clearing.
  5. ...

5 True/False questions

  1. The accounting functions and the cash receipts functions should be handled by which department(s)? A-Both functions should be under the control of the company Treasurer B-Both functions should be under the control of the company Controller C-The Controller should have control of accounting functions and the Treasurer should have control of cash receipt functions. D-The Treasurer should have control of accounting functions and the Controller should have control of cash receipt functions.This act allows financial institutions to creat and process electronic "substitute checks" in place of customer written hard-copy checks. The purpose of this act is to drease the time for check clearing.

          

  2. Which of the following is confirmed on the standard form used for cash balances at financial institution? A-Factored accounts receivable B-Loss contingencies C-Loans payable D-Safe deposit boxes controlled by the entityC-Loans payable

          

  3. A four column bank reconciliation ("proof of cash") will generally assist an auditor in detecting: A-An unrecorded (on the books) deposit made at the beginning of the month; the amount was withdrawn late in the month, again with no book entry. B-A second payment of a liability that had already been paid in full. C-A check written and recorded on the books for $2,000, not $200 the amount of the actual liability. D-An embezzlement of a portion of the company's petty cash.D-Verify the company owns the security, check the accuracy of the accrual, and require no adjustment.

          

  4. Which of the following is most likely to indicate fraud? A-Several overpayments are made for goods received from a supplier. B-The year end cash balance does not include cash in transit to the company at year-end. C-A check received after year end was inadvertently recorded as if received before year-end. D-A documented loan to an officer of the companyA-Several overpayments are made for goods received from a supplier.

          

  5. Which of the following is correct concerning cash confirmation requests? A-They ask for information on kiting activities. B-They should be sent quarterly by the auditors to financial institutions the client has accounts with. C-They should be sent by the client to financial institutions the client has accounts with. D-They may be sent electronically or non-electronically.D-They may be sent electronically or non-electronically.

          

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