CPA Exam Sample Questions Pt. 2

Description

Part 2 of my Audit Testing CPA Exam sample questions.
nedtuohy
Quiz by nedtuohy, updated more than 1 year ago
nedtuohy
Created by nedtuohy almost 10 years ago
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Resource summary

Question 1

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

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

Question
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
Answer
  • 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

Question
Lapping would most likely be detected by
Answer
  • 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

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