ch 11 audit hw

For effective internal control purposes, which of the following individuals should be responsible for mailing signed checks?

accounts payable clerk

payroll clerk

receptionist

treasurer

treasurer

In a properly designed purchasing process, the same employee most likely would match vendors’ invoices with receiving reports and:

recompute the calculations on vendors’ invoices.

reconcile the accounts payroll ledger.

cancel vendors’ invoices after payment.

post the detailed accounts payable records.

recompute the calculations on vendors’ invoices.

In a properly designed accounts payable system, a voucher is prepared after the invoice, purchase order, requisition, and receiving report are verified. The next step in the system is:

entering of the voucher into the voucher register.

approval of the voucher for payment.

cancelation of the supporting documents.

entry of the check amount in the check register.

entering of the voucher into the voucher register.

Which of the following control activities is not usually performed in the accounts payable department?

matching the vendor’s invoice with the related receiving report

approving vouchers for payment by having an authorized employee sign the vouchers

accounting for unused prenumbered purchase orders and receiving reports

indicating the asset and expense accounts to be debited

accounting for unused prenumbered purchase orders and receiving reports

Purchase cutoff procedures should be designed to test whether all inventory:

owned by the entity is in the possession of the entity at the end of the year.

purchased and received before the end of the year was recorded.

ordered before the end of the year was received.

purchased and received before the end of the year was paid for.

purchased and received before the end of the year was recorded.

Internal control is strengthened when the quantity of merchandise ordered is omitted from the copy of the purchase order sent to the:

department that initiated the requisition.

purchasing agent.

receiving department.

accounts payable department.

receiving department.

To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all:

purchase orders.

canceled checks.

vendor invoices.

receiving reports.

receiving reports.

When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be:

invoices filed in the entity’s open invoice file.

vendors with whom the entity has previously done business.

amounts recorded in the accounts payable subsidiary ledger.

payees of checks drawn in the month before year-end.

vendors with whom the entity has previously done business.

Which of the following audit procedures is best for identifying unrecorded trade accounts payable?

Investigation of payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports.

Reconciliation of vendors’ statements to the file of receiving reports to identify items received just prior to the balance sheet date.

Review of cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period.

Examination of unusual relationships between monthly accounts payable balances and recorded cash payments.

Review of cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period.

When goods are received, the receiving clerk should match the goods with:

the vendor invoice and the purchase order.

the requisition form.

the approved purchase order.

the vendor invoice and the vendor shipping document.

the approved purchase order.

Which of the following procedures is least likely to be performed before the balance sheet date?

confirmation of receivables

search for unrecorded liabilities

test of internal control over cash

observation of inventory

search for unrecorded liabilities