ACC 492 Week 1 Individual Multiple Choice
ACC 492 Week 1 Individual Multiple Choice
Post your answers to the Multiple Choice Questions in the Assignments folder.
Be prepared to take a quiz on topics covered in the assigned readings for Week one.
| 1. | Which of the following accounts in a merchandising company is affected by both the revenue cycle and another cycle? | |||
| a. | sales | |||
| b. | sales returns and allowances | |||
| c. | inventory | |||
| d. | accounts receivable | |||
| e. | accounts payable | |||
| 2. | The audit objective, “The accounts receivable balance represents gross claims on customers and agrees with the sum of the accounts receivable subsidiary ledger” is derived from the assertion of: | |||
| a. | existence or occurrence | |||
| b. | completeness | |||
| c. | rights and obligations | |||
| d. | valuation or allocation | |||
| e. | presentation or disclosure | |||
| 3. | All sales, cash receipts, and sales adjustments are accurately valued using GAAP and correctly journalized, summarized and posted are transaction objectives for:
a. occurrence b. completeness c. accuracy d. cutoff e. classification |
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| 4. | Disclosure objectives includes all of the following except:
a. occurrence and rights and obligations b. cutoff c. completeness d. classification and understandability e. accuracy and valuation |
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| 5. | The bonding of employees will normally be expected to: | |||
| a. | “weed out” dishonest employees already hired | |||
| b. | eliminate the need for separation of duties in the cash receipts area | |||
| c. | guarantee that all employee fraud will be prevented | |||
| d. | provide reasonable assurance that all employees will perform their jobs with the utmost integrity | |||
| e. | serve as a deterrent to dishonesty | |||
| 6. | A company policy states that annual vacations are mandatory for all employees. This policy is most important for employees who: | |||
| a. | are not bonded | |||
| b. | handle cash receipts | |||
| c. | maintain the detailed accounting records | |||
| d. | have access to the general ledger | |||
| e. | serve as inventory clerks | |||
| 7. | A company has a policy of rotating employees’ assigned duties. This policy is most important for employees who: | |||
| a. | are not bonded | |||
| b. | maintain the detailed accounting records | |||
| c. | handle cash receipts | |||
| d. | have access to the general ledger | |||
| e. | serve as inventory clerks | |||
| 8. | Auditors should evaluate new controls associated with all of the following except: | |||
| a. | new product lines | |||
| b. | new sources of revenues | |||
| c. | management’s response to new accounting standards for revenue transactions | |||
| d. | related changes in personnel | |||
| e. | all of the above | |||
| 9. | An understanding of the revenue accounting system requires knowledge of all of the following except: | |||
| a. | how sales are initiated | |||
| b. | how goods and services are delivered | |||
| c. | how payables are recorded | |||
| d. | how cash is received | |||
| e. | how sales adjustments are made | |||
| 10. | In a credit-merchandising environment, which of the following documents usually initiates the activity in the sales cycle? | |||
| a. | shipping document | |||
| b. | customer order | |||
| c. | material requisition | |||
| d. | sales invoice | |||
| e. | sales order | |||
