Gleims CPA Test Prep Auditing Complete 100

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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

• Employee overtime wages.
• Write-offs of customer accounts.
• Credit granted to customers.
• Cash disbursements.

B

To conceal defalcations involving receivables, the auditor would expect an experienced bookkeeper to charge which of the following accounts?

• Sales returns.
• Petty cash.
• Miscellaneous expense.
• Miscellaneous income.

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To safeguard the assets through effective internal control, accounts receivable that are written off should be transferred to

• A separate ledger.
• An attorney for evidence in collection proceedings.
• A tax deductions file.
• 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

• Shipping department supervisor.
• Receiving clerk.
• Sales clerk.
• 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

• Ascertain that materials paid for are on hand.
• Investigate the recording of unusual transactions regarding

materials.

• Observe the annual physical count.
• 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

• Request internal auditors to confirm selected purchases and

accounts payable.

• Specify that all items purchased must pass value-per-unit-of-

cost reviews.

• Direct the purchasing department to maintain records on

purchase prices paid, with review of such records required every

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• Require competitive bidding.

D

In a well-designed internal control system, employees in the same department most likely would approve purchase orders, and also

• Inspect goods upon receipt.
• Authorize requisitions of goods.
• Reconcile the open invoice file.
• 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?

• Names and addresses on vendor invoices should be compared

to a list of department-authorized vendors.

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