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The cash disbursements journal also is called thea) Voucher register.b) Purchases journal.c) Check register.d) Accounts payable subsidiary ledger.a) Completeness.b) Existence or occurrence.c) Valuation or allocation.d) Rights and obligations.a) Improper materials handling.b) Unauthorized persons issuing purchase orders.c) Mispostings of purchase returns.d) Excessive shrinkage or spoilage.a) Footing the purchases journal.b) Reconciling vendors monthly statements with subsidiary payable ledger accounts.c) Tracing totals from the purchases journal to the ledger accounts.d) Sending written quarterly confirmation to all vendors.a) Personnel.b) Treasurer.c) Controller.d) Payroll.a) Payments to fictitious employees.b) Payments to terminated employees.c) Payments to valid employees who have not worked.d) Payment to valid employees at a rate in excess of the authorized amount.a) Posting of gross payroll amounts to incorrect salary expense accounts.b) Overpayments and unauthorized payments.c) Misfootings of employee time records.d) Excess withholding of amounts required to be withheld.a) Payments to employees are computed at authorized rates.b) Internal controls relating to unclaimed payroll checks are operating effectively.c) Segregation of duties exist between the preparation and distribution of the payroll.d) Employees work the number of hours for which they are paid.a) Payrolls checks are disbursed be the same employee each payday.b) There are significant unexplained variances between standard and actual labor cost.c) Employee time cards are approved by individual departmental supervisors.d) A separate payroll bank account is maintained on an imprest basis.a) Production Department.b) Accounting Department.c) Warehousing Department.d) Budget Department.a) Raw materials stores.b) Cost accounting.c) IT.d) Inventory management.a) Purchase requisitions initiated by authorized personnel.b) Recorded inventory actually exists.c) Inventory properly accumulated from journals and ledgers.d) All inventory is recorded.a) Determining standard costs.b) Observing physical inventory.c) Completing the book to physical adjustment.d) Determining the amount of consigned inventory.a) Inventory cutoff errors.b) Misapplication of LIFO.c) Unreported scrap or spoilage.d) Theft.a) Adequacy of the provision for uncollectible accounts.b) Appropriateness of physical inventory observation procedures.c) Existence of obsolete machinery.d) Deferral or procurement of certain necessary insurance coverage.a) Adequacy of internal controls.b) Extent of property abandoned during the year.c) Adequacy of replacement funds.d) Reasonableness of the depreciation.a) Insured values greatly in excess of book values.b) Large amounts of fully depreciated assts.c) Continuous trade-in s of relatively new assets.d) Excessive recurring losses on assets retired.a) Depreciation expense.b) Accounts payable.c) Cash.d) Repairs and maintenance.a) Valuation or allocation.b) Existence or occurrence.c) Completeness.d) Rights and obligations.a) Examine the current year s canceled checks.b) Review the mortgage amortization schedule.c) Inspect public records of lien balances.d) Re-compute mortgage interest expense.a) Validity.b) Authorization.c) Completeness.d) Ownership.a) Evaluate internal control over securities.b) Determine the validity of prepaid interest expense.c) Ascertain the reasonableness of imputed interest.d) Detect unrecorded liabilities.a) Bonds are sold on the open market.b) Bonds are issued at a discount or premium.c) The loans are from banks.d) The company has many short-term leases.a) The number of transactions is small.b) Controls over stockholders equity transactions typically are weak.c) A reliance strategy is most efficient.d) A substantive strategy likely was used in prior years.a) Separation of cash record-keeping from custody of cash.b) Preparation of the monthly bank reconciliation.c) Batch processing of checks.d) Separation of cash receipts from cash disbursements.a) Review the composition of authenticated deposit slips.b) Review subsequent bank statements received directly from the banks.c) Prepare a schedule of bank transfers.d) Prepare year-end bank reconciliations.a) Check register for the last month is reviewed.b) Cutoff bank statement is reconciled.c) Bank confirmation is reviewed.d) Search for unrecorded liabilities is preformed.a) Proof of cash.b) Bank reconciliation.c) Cash confirmation.d) Evaluate ratio of cash to current liabilities.a) A bank lockbox system.b) Pre-numbered remittance advices.c) Monthly bank reconciliation.d) Daily deposit of cash receipts.a) Reading the minutes of the board of directors.b) Reviewing the bank confirmation letter.c) Examining customer confirmation replies.d) Examining invoices for professional services.a) Letter of audit inquiry to the client s lawyer.b) Letter of corroboration from the auditor s lawyer upon review of the legal documentation.c) Confirmation of claims and assessments from the other parties to the litigation.d) Confirmation of claims and assessments from an officer of the court presiding over the litigation.a) Substantiate accruals.b) Assess the legal ramifications of litigation in progress.c) Estimate the dollar amount of contingent liabilities.d) Identify possible unasserted litigation claims and assessments.a) Honor the confidentiality of the client-lawyer relationship.b) Consider the refusal to be tantamount to a scope limitation.c) Seek to obtain the corroborating information from management.d) Disclose this fact in a footnote to the financial statements.a) a merger discussion.b) The application for a patent on a new production process.c) Discussions with a customer that could lead to a 40 percent increase in the client s sales.d) The bankruptcy of a customer who regularly purchased 30 of the company s output.a) Client s management.b) Independent auditor.c) Audit committee.d) AICPA.a) Restriction imposed by the client.b) Reliance placed on the report of another auditor.c) Inability to obtain sufficient competent evidential matter.d) Inadequacy in the accounting records.a) Qualified opinion due to a scope limitation.b) Qualified opinion due to a departure from GAAP.c) Unqualified opinion with an explanatory paragraph.d) Unqualified opinion in a standard auditor s report.a) Possibility of purchasing certain assets rather than leasing them.b) Capability of extending the due dates of existing loans.c) Feasibility of operating at increased levels of production.d) Marketability of property and equipment that management plans to keep.a) Limited to include only events occurring up to the date of the last subsequent event referenced.b) Limited to the specific event referenced.c) Extended to subsequent events occurring through the date of issuance of the report.d) Extended to include all events occurring since the completion f fieldwork.a) Suggests that auditors should always verify ownership of a client s material tangible assets.b) Is primarily concerned with equity and impartiality.c) Suggests that an individual s actions should not violate the liberties of any individual.d) Recognizes that decisions involve trade-offs between costs and benefits.a) Which owes the CPA audit fees for more than one year.b) In which the CPA has a large active margin account.c) In which the CPA s brother is the controller.d) Which owes the CPA audit fees for current year services and has just filed a petition for bankruptcy.a) Reduce risk and liability.b) Comply with the generally accepted standards of fieldwork.c) Become independent in face.d) Maintain public confidence in the profession.a) Integrity.b) Due care.c) Reporting.d) Scope and nature of services.a) Complying with Statements on Standards for Consulting Services.b) Obtaining an understanding of the nature scope and limitations of the engagement.c) Supervising staff who are assigned to the engagement.d) Maintaining independence from the client.a) Issuing a modified report explaining a failure to follow a governmental regulatory agency s standards when conducting an attest service for a client.b) Revealing confidential client information during a quality review of a professional practice by a team from the state CPA society.c) Accepting a contingent fee for representing a client in an examination of the client s federal tax return by an IRS agent.d) Retaining client records after an engagement is terminated prior to completion and the client has demanded their return.a) Negligence.b) Fraud.c) An error in judgment.d) Constructive negligence.a) To do the job correctly and discover all irregularities.b) To follow generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS).c) To act as a professional and not commit fraud.d) To exercise the skill and care of the ordinarily prudent accountant in the same circumstances.a) A shareholder of the client.b) A lender bank when the accountant knows only that the client will use the financial statements to obtain a loan from an unspecified source.c) A bank when the accountant knows the client will rely on the financial statements as the basis for a loan from the bank.d) An investor if the accountant knows that the client is seeking capital from a select group of investors.a) Work-papers are subject to the privileged communication rule which in most jurisdictions prevents any third-party access to the work-papers.b) Work-papers may never be obtained by a third-party unless the client consents.c) Work-papers are the client s exclusive property.d) Work-papers are not transferable to a purchaser of a CPA practice unless the client consents.a) Granting of credit.b) Shipment f goods.c) Determination of discounts.d) Selling of goods for cash

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