ACC 403 Final Exam Part 2
This final exam consists of 30 multiple choice questions and covers the material in Chapters 14 through 17, 21, and 24.
A document prepared to initiate shipment of the goods sold by an independent shipper is the:
The document used to indicate to the customer the amount of a sale and payment due date is the:
Who is generally responsible for opening receipts when a company uses a lockbox to speed the handling of cash receipts?
An effective procedure to test for unbilled shipments is to trace from the:
A ________ is a document that is matched with the customer order to assure that the correct quantity and type of goods are shipped.
The most serious shortcoming of the haphazard sample selection method is:
When the computed upper exception rate is greater than the tolerable exception rate, it is necessary for the auditor to take specific action. Which of the following courses of action would be most difficult to justify?
A sample in which every possible combination of items in the population has an equal chance of constituting the sample is a:
In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the:
When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use:
If the client's internal control for recording sales returns and allowances is evaluated as ineffective:
The understatement of sales and accounts receivable is best uncovered by:
The audit procedure that provides the auditor with the most appropriate evidence when performing test of details of balances for accounts receivable is:
Which of the following most likely would be detected by a review of a client's sales cutoff?
The most important aspect of evaluating the client's method of obtaining a reliable cutoff is to:
The client's trial balance has a balance of $410,000 for merchandise inventory. As the auditor you are willing to accept a balance that is within $20,000 of either side of the recorded balance. You compute a 95% confidence interval of $395,000 to $425,000. You could therefore:
When the sample selection is done using probability proportional to size sample selection (PPS):
The appropriate assumption to make regarding the overall percent of error in those population items containing an error is:
When errors are found in a sample, auditors in practice generally make the assumption:
If an auditor desires a greater level of assurance in auditing a balance, the acceptable risk of incorrect acceptance:
From which of the following evidence-gathering audit procedures would an auditor obtain most assurance concerning the existence of inventories?
Comparing the physical counts with the perpetual inventory master files satisfies the balance-related audit objective of:
A major difficulty in the verification of inventory cost records for the purpose of inventory valuation is in determining the reasonableness of the:
Boxes or other containers holding inventory should also be opened during test counts to determine the ________ of the inventory.
You are auditing the inventory account and are concerned about the possibility of an inventory overstatement. What is the best audit procedure to detect damaged inventory?
One of the primary approaches in dealing with uncertainties in loss contingencies uses a ________ threshold.
If a potential loss on a contingent liability is remote, the liability usually is:
While there is no professional requirement to do so on audit engagements, CPAs frequently issue a formal "management" letter to clients. The primary purpose of this letter is to provide:
The standard letter of inquiry to the client's legal counsel should be prepared on:
The letter of representation obtained from an audit client should be: