CPA Exam Sample Questions Pt. 2

Question 1 of 5

Medal-premium 1

Which of the following is not a principal objective of the auditor in the examination of revenues?

Select one of the following:

  • To verify cash deposited during the year.

  • To evaluate internal control, with particular emphasis on the use of accrual accounting to record revenue.

  • To verify that earned revenue has been recorded, and recorded revenue has been earned.

  • To identify and interpret significant trends and variations in the amounts of various categories of revenue.

Question 2 of 5

Medal-premium 1

Which of the following procedures would ordinarily be expected to best reveal unrecorded sales at the balance sheet date?

Select one of the following:

  • Compare shipping documents with sales records.

  • Apply gross profit rates to inventory disposed of during the period.

  • Trace payments received subsequent to the balance sheet date.

  • Send accounts receivable confirmation requests.

Question 3 of 5

Medal-premium 1

If accounts receivable turned over 7.1 times in 1979 as compared to only 5.6 times in 1980, it is possible that there were

Select one of the following:

  • Unrecorded credit sales in 1980.

  • Unrecorded cash receipts in 1979.

  • More thorough credit investigations made by the company late in 1979.

  • Fictitious sales in 1980.

Question 4 of 5

Medal-premium 1

Lapping would most likely be detected by

Select one of the following:

  • Examination of canceled checks clearing in the bank cut-off period.

  • Confirming year-end bank balances.

  • Preparing a schedule of interbank transfers.

  • Investigating responses to accounts receivable confirmations.

Question 5 of 5

Medal-premium 1

When there are a large number of relatively small account balances, negative confirmation of A/R is feasible if I/C is

Select one of the following:

  • Strong, and the individuals receiving the confirmation requests are unlikely to give them adequate consideration.

  • Weak, and the individuals receiving the confirmation requests are likely to give them adequate consideration.

  • Weak, and the individuals receiving the confirmation requests are unlikely to give them adequate consideration

  • Strong, and the individuals receiving the confirmation requests are likely to give them adequate consideration.

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CPA Exam Sample Questions Pt. 2

nedtuohy
Quiz by , created over 2 years ago

Part 2 of my Audit Testing CPA Exam sample questions.

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nedtuohy
Created by nedtuohy over 2 years ago
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