Deck 13 Flashcards Preview

Audit > Deck 13 > Flashcards

Flashcards in Deck 13 Deck (19):
1

Incoming mail must be opened by:

A person who does not have access to the accounts receivable ledger

2

Where should a copy of cash receipts go?

Sent to cashier to prepare the bank deposit; also A/R department

3

Check deposit summary

Represents what the cashier took to the bank

4

When should positive confirmations be used?

1. Large $ amounts
2. Expect errors/disputes
3. Weak internal control

5

When should negative confirmations be used?

1. Low risk
2. small balances
3. expect customer attention

6

Blind copy of purchased order

Receiving department receives copy of purchased order with the quantity ordered being blank

7

Three functions of the accounting department

1. Record the payable
2. Approve invoice for payment
3. Record the payment after it is paid by the TREASURER

8

Voucher package

Invoice, receiving report, purchase order, and requisition

9

Best test for completeness of accounts payable:

Search for unrecorded liabilities

10

Lapping

Use today's cash receipts to cover yesterday's theft

11

Kiting

Cash is recorded at two places at once

12

Dual-purpose test

Performing both test of details and test of controls

13

Segregation of duties related to inventory

Purchasing, receiving, warehouse, and shipping should be segregated

14

Three important pieces of evidence involving inventory testing

1. Test counts
2. Inventory report
3. Pre-numbered tags

15

Special controls related to PPE

Acquisition, subsidiary ledgers, physical security, written policies, disposition

16

Trading and available-for-sale securities are carried at:

Fair value

17

Held-to-maturity debt securities should be carried at:

Amortized cost

18

Testing for unrecorded retirements of fixed assets:

1. Company does not/cannot insure an asset it does not have
2. Company does not pay taxes on unowned property
3. Tour plant/inquire

19

Reviewing related repair and maintenance expense accounts tests for:

Completeness of asset additions (Items that should have been capitalized)