Acc 492 Week 1 Individual Multiple Choice

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ACC 492 Week 1 Individual Multiple Choice

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Post your answers to the Multiple Choice Questions in the <strong>Assignments</strong> folder.Be prepared to take a quiz on topics covered in the assigned readings for Week one.<table width="668" border="0" cellspacing="0" cellpadding="0"><tbody><tr><td>1.</td><td colspan="4">Which of the following accounts in a merchandising company is affected by both the revenue cycle and another cycle?</td></tr><tr><td> </td><td>a.</td><td>sales</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>sales returns and allowances</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>inventory</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>accounts receivable</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>accounts payable</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>2.</td><td colspan="4">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:</td></tr><tr><td> </td><td>a.</td><td>existence or occurrence</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>completeness</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>rights and obligations</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>valuation or allocation</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>presentation or disclosure</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>3.</td><td colspan="4">All sales, cash receipts, and sales adjustments are accurately valued using GAAP and correctly journalized, summarized and posted are transaction objectives for:a. occurrenceb. completenessc. accuracyd. cutoffe. classification</td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>4.</td><td colspan="4">Disclosure objectives includes all of the following <span style="text-decoration: underline;">except</span>:a. occurrence and rights and obligationsb. cutoffc. completenessd. classification and understandabilitye. accuracy and valuation</td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>5.</td><td colspan="4">The bonding of employees will normally be expected to:</td></tr><tr><td> </td><td>a.</td><td>“weed out” dishonest employees already hired</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>eliminate the need for separation of duties in the cash receipts area</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>guarantee that all employee fraud will be prevented</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>provide reasonable assurance that all employees will perform their jobs with the utmost integrity</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>serve as a deterrent to dishonesty</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>6.</td><td colspan="4">A company policy states that annual vacations are mandatory for all employees. This policy is most important for employees who:</td></tr><tr><td> </td><td>a.</td><td>are not bonded</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>handle cash receipts</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>maintain the detailed accounting records</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>have access to the general ledger</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>serve as inventory clerks</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>7.</td><td colspan="4">A company has a policy of rotating employees’ assigned duties. This policy is most important for employees who:</td></tr><tr><td> </td><td>a.</td><td>are not bonded</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>maintain the detailed accounting records</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>handle cash receipts</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>have access to the general ledger</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>serve as inventory clerks</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>8.</td><td colspan="4">Auditors should evaluate new controls associated with all of the following <span style="text-decoration: underline;">except:</span></td></tr><tr><td> </td><td>a.</td><td>new product lines</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>new sources of revenues</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>management’s response to new accounting standards for revenue transactions</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>related changes in personnel</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>all of the above</td><td colspan="2"> </td></tr><tr><td>9.</td><td colspan="4">An understanding of the revenue accounting system requires knowledge of all of the following <span style="text-decoration: underline;">except</span>:</td></tr><tr><td> </td><td>a.</td><td>how sales are initiated</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>how goods and services are delivered</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>how payables are recorded</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>how cash is received</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>how sales adjustments are made</td><td colspan="2"> </td></tr><tr><td> </td><td> </td><td> </td><td colspan="2"> </td></tr><tr><td>10.</td><td colspan="3">In a credit-merchandising environment, which of the following documents usually initiates the activity in the sales cycle?</td><td> </td></tr><tr><td> </td><td>a.</td><td>shipping document</td><td colspan="2"> </td></tr><tr><td> </td><td>b.</td><td>customer order</td><td colspan="2"> </td></tr><tr><td> </td><td>c.</td><td>material requisition</td><td colspan="2"> </td></tr><tr><td> </td><td>d.</td><td>sales invoice</td><td colspan="2"> </td></tr><tr><td> </td><td>e.</td><td>sales order</td></tr></tbody></table>
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