Page 22 - eBook Audit Of Financial Statement Components

7. ______________ test is a useful procedure to determine whether

all recorded cash receipts have been deposited in the bank
account.
A Proof of collections
B Proof of book expense
C Proof of sales receipts
D Proof of cash receipts

8. Periodic aging of accounts receivable is a control to reduce:
A Theft of fixed assets
B Sales returns and allowances
C Theft of inventory
D Un-collectable accounts

9. The testing of controls and substantive tests of transactions in the
sales and collection cycle affects the:
A Confirmation of accounts receivable
B Confirmation of accounts payable
C Confirmation of long-term debt
D Confirmation of fixed assets

10. Estimation of bad debt expenses should be considered during the
audit of sales.
A True
B False

11. A sales invoice is a document sent by mail or electronically to each
customer indicating the beginning balance of their accounts
receivable.
A True
B False

12. A company should expect to collect 100% of their sales.
A True
B False

13. An example of internal controls for sales is pre-numbered
documents.
A True
B False

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