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Auditing questions

1. Immediately upon receipt of cash, a responsible employee should

a. Record the amount in the cash receipts journal.
b. Prepare a remittance listing.
c. Update the subsidiary accounts receivable records.
d. Prepare a deposit slip in triplicate.

2. Upon receipt of customers' checks in the mail room, a responsible employee should prepare a remittance listing that is forwarded to the cashier. A copy of the listing should be sent to the

a. Internal auditor to investigate the listing for unusual transactions.
b. Treasurer to compare the listing with the monthly bank statement.
c. Accounts receivable bookkeeper to update the subsidiary accounts receivable records.
d. Entity's bank to compare the listing with the cashier's deposit slip.

3. When a sample of customer accounts receivable is selected for vouching debits therein for existence evidence, the auditors will vouch them to

a. Sales invoices with shipping documents and customer sales invoices.
b. Records of accounts receivable write-offs.
c. Cash remittance lists and bank deposit slips.
d. Credit files and reports.

4. In the audit of accounts receivable, the most important emphasis should be on the

a. Completeness assertions.
b. Existence assertion.
c. Rights and obligations assertion.
d. Presentation and disclosure assertion.

5. When accounts receivable are confirmed at an interim date, the auditors need not be concerned with
a. Obtaining a summary of receivables transactions from the interim date to the yearend date.
b. Obtaining a year-end trial balance of receivables, comparing it to the interim trial balance, and obtaining evidence and explanations for large variations.
c. Sending negative confirmations to all the customers as of the year-end date.
d. Considering the necessity for some additional confirmations as of the balance sheet date if balances have increased materially.

Solution Preview

1. Immediately upon receipt of cash, a responsible employee should
d. Prepare a deposit slip in triplicate.

2. Upon receipt of customers' checks in the mail room, a responsible employee should prepare a remittance listing ...

Solution Summary

One sentence explains each choice.

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