Sales information for Tesla Inc. follows. Year Ended December 31 ($ thousands) 2018 2017 2016 Automotive sales $17,631,522 $8,534,752 $5,589,007 Automotive leasing 883,461 1,106,548 761,759 Total auto... Show On July 31, 2022, the general ledger of Sheridan Legal Services Inc. showed the following balances: Cash $4,400, Accounts Receivable $1,650, Supplies $550, Equipment $5,500, Accounts Payable $4,510, C... . Question 3 Papa Kedana Berhad is considering the following two projects: Project Initial outlay Net cash flows for year: 1 2 3 4 Sakit Hati RM4,000,000 RM2,003,000 RM2,003,000 RM2,003,000 RM2,003,... An investor is considering the purchase of a small office building. The NOI is expected to be the following: Year 1, $216,000; Year 2, $226,000; Year 3, $236,000; Year 4, $246,000; Year 5, $256,000. T... On July 1, 2014, Niagara Steel Corporation, Inc., issued 2,100, 8%, 10-year convertible bonds maturing on June 30, 2024, with semi-annual coupon payments on July 1 and January 1. Each $1,000 bond can ... Published on November 2016 | Categories: Documents | Downloads: 416 | Comments: 0 | Views: 5574 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Chapter 11 1. The department approving a sales transaction should be the shipping department. 2.
Accounts receivable that are written-off should not be turned over to a collection agency. 3. An aged trial balance of accounts receivable may provide evidence on the adequacy of the 4. Confirmation of accounts receivable by direct communication with the debtor tests the 5. Confirmation requests should contain a "business reply" envelope addressed to
the auditors 6. CPAs use negative accounts receivable confirmation requests more frequently than positive 7. Confirmation of accounts receivable provides some assurance that no lapping or other 11-1 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 8. Analytical
procedures are used by auditors to gain evidence about the adequacy of the 9. When it is impossible to confirm accounts receivable, the auditors may be able to satisfy 10. Material accounts receivable from related parties should be stated separately from other Multiple Choice Questions 11. To test the existence assertion for recorded receivables, an auditor would select a sample 12. Which of the following is least likely to be typically considered to be an alternate 11-2 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 13. Your client performed the physical count of inventory as of November 30, one month 14. Which of the following would be least likely to diminish the validity of evidence obtained 15. When control risk for the existence assertion is assessed at a high level, which of the 16. What type of error is the CPA most likely to discover when he/she examines all shipping 11-3 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 17. Which of the
following is not typically considered to be an alternate procedure for 18. Which of the following fraudulent activities most likely could be perpetrated due to the 19. A client might overstate December 31 accounts receivable balances by dating and 20. Which of the following is a likely procedure to test the adequacy of the allowance for 11-4 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 21. Which of the following is most likely to be used in determining a proper amount to be 22. For effective internal control, the billing function should not be performed by the: 23. Which procedure would be of most assistance to an auditor discovering a large credit sale 24. An audit basically consists of having the auditor form an opinion regarding management's 25. The confirmation of accounts receivable is most closely associated with: 11-5 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 26. Analytical procedures performed during an audit indicate that accounts receivable doubled 27. After the CPAs have
selected particular accounts receivable for confirmation: 28. Which of the following manipulations would understate receivables on the financial 11-6 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 29. You were surprised to note that approximately 95% of returned positive accounts 30. An auditor who uses a transaction cycle approach to assessing control risk most likely 31. Which of the following fraudulent activities most likely could be perpetrated due to the 32. Which of the following procedures is least likely to help auditors to assess the adequacy 11-7 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 33. Which of the following is consistent with effective internal control over sales 34. Tracing recorded sales transactions to the bills of lading provides evidence about the: 35.
To obtain the best evidence regarding the completeness of recorded accounts receivable, 36. Which of the following generally provides the least evidence regarding the valuation of 37. Which of the following would indicate the need to use positive accounts receivable 11-8 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 38. Which of the following is not true about the confirmation of accounts receivable? 39. Which of the following is not true about the auditors' verification of notes receivable? 40. To verify that all sales that have been shipped to customers have been recorded, a test of 41. Auditors may use positive and/or negative forms of confirmation
requests for accounts 11-9 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 42. The auditors obtain audit evidence for accounts receivable by using positive or negative 43. When scheduling the audit work to be performed on an engagement, the auditors should 44. It is sometimes impossible for the auditors to use normal accounts receivable confirmation 45. The audit working papers often include a client-prepared, aged trial balance of accounts 11-10 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 46. Which of the following is not a primary objective of the auditors in the examination of 47. Once a CPA has determined that accounts receivable have increased due to slow 48. Which of the
following sets of duties would ordinarily be considered basically 49. Tracing copies of sales invoices to shipping documents will provide evidence that all: 11-11 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 50. Which of the following is the best argument against the use of
negative accounts 51. When there are a large number of relatively small account receivable balances, negative 52. An auditor should perform alternative procedures to substantiate the existence of accounts 11-12 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 53. The confirmation process may be performed using a(n): A. Option A 54. A CPA examines a sample of copies of December and January sales invoices for the 55. Which of the following is not one of the criteria for revenue recognition? 56. Recognizing a loan received as revenue instead of as a liability has a positive effect on the 11-13 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 57. In your review of ABC Company's financials, you note that Receivables have increased 58. Which of the following revenue related transactions is not linked to the accounts 59. The individual looking for guidance on revenue recognition is most likely to appropriately 60. An auditor discovered that a client's accounts receivable turnover is substantially lower for 11-14 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 61. Which of the following does not meet the definition of an external confirmation in the 62. Tracing recorded sales transactions in the sales journal to the shipping documents (bills of 11-15 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 63. The auditor determines that both of the following objectives will be part of the audit of Selection List 11-16 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 5. Which of the following is most likely to increase days' sales in accounts receivable at the 11-17 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 64. As part of the fieldwork of an audit engagement, the senior on the audit obtained and
Selection list 11-18 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Confirmation Letters Susan's note to file: 11-19 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: 11-20 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: 11-21 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: February 1, year 3 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Dear Sirs: Susan's note to file: 11-23 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 65. Confirmation of accounts receivable is presumptively mandatory audit procedure. In 66. Internal control over sales transactions is very important to the
effectiveness of an 11-24 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 67. Fraudulent sales are occasionally recorded at year-end as a means of overstating financial 11-25 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Chapter 11 Accounts Receivable, Notes Receivable, and Revenue Answer Key True / False Questions 1. The department approving a sales transaction should be the shipping department. AACSB: Analytic 2. Accounts receivable that
are written-off should not be turned over to a collection agency. AACSB: Analytic 11-26 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 3.
An aged trial balance of accounts receivable may provide evidence on the adequacy of the AACSB: Analytic 4. Confirmation of accounts receivable by direct communication with the debtor tests the AACSB: Analytic 11-27 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 5. Confirmation requests should contain a "business reply" envelope addressed to the auditors AACSB: Analytic 6. CPAs use negative accounts receivable confirmation requests more frequently than positive AACSB: Analytic 7. Confirmation of accounts receivable provides some assurance that no lapping or other AACSB:
Analytic 11-28 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 8. Analytical
procedures are used by auditors to gain evidence about the adequacy of the AACSB: Analytic 9. When it is impossible to confirm accounts receivable, the auditors may be able to satisfy AACSB: Analytic 10. Material accounts receivable from related parties should be stated separately from other AACSB: Analytic 11-29 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 11. To test the existence assertion for recorded receivables, an auditor would select a sample AACSB: Analytic 12. Which of the
following is least likely to be typically considered to be an alternate AACSB: Analytic 11-30 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 13. Your client performed the physical count of inventory as of November 30, one month AACSB: Analytic 14. Which of the following would be least likely to diminish the validity of evidence obtained AACSB: Analytic 11-31 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 15. When control risk for the existence assertion is assessed at a high level, which of the AACSB: Analytic 16. What type of error is the CPA most likely to discover when he/she examines all shipping AACSB: Analytic 11-32 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 17. Which of the following is not typically considered to be an alternate procedure for AACSB: Analytic 18. Which of the following fraudulent activities most likely could be perpetrated due to the AACSB: Analytic 11-33 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 19. A client might overstate December 31 accounts receivable balances by dating and AACSB:
Analytic 20. Which of the following is a likely procedure to test the adequacy of the allowance for AACSB: Analytic 11-34 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 21. Which of the following is most likely to be used in determining a proper amount to be AACSB: Analytic 22. For effective internal
control, the billing function should not be performed by the: AACSB: Analytic 11-35 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 23. Which procedure would be of most assistance to an auditor discovering a large credit sale AACSB: Analytic 24. An audit basically consists of having the auditor form an opinion regarding management's AACSB: Analytic 11-36 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 25. The confirmation of accounts receivable is most closely associated with: AACSB: Analytic 26. Analytical procedures performed during an audit indicate that accounts receivable doubled AACSB: Analytic 11-37 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 27. After the CPAs have selected particular accounts receivable for confirmation: AACSB: Analytic 28. Which of the following manipulations would understate receivables on the financial AACSB: Analytic 11-38 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 29. You were surprised to note that approximately 95% of returned positive accounts AACSB: Analytic 30. An auditor who uses a transaction cycle approach to assessing control risk most likely AACSB: Analytic 11-39 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 31. Which of the following fraudulent activities most likely could be
perpetrated due to the AACSB: Analytic 32. Which of the following procedures is
least likely to help auditors to assess the adequacy AACSB: Analytic 11-40 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 33. Which of the following is consistent with effective
internal control over sales AACSB: Analytic 34. Tracing recorded sales transactions to the bills of lading provides evidence about the: AACSB: Analytic 11-41 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 35. To obtain the best
evidence regarding the completeness of recorded accounts receivable, AACSB: Analytic 36. Which of the following generally provides the least evidence regarding the valuation of AACSB: Analytic 11-42 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 37. Which of the following would indicate the need to use positive accounts receivable AACSB: Analytic 38. Which of the following is not true about the confirmation of accounts receivable? AACSB: Analytic 11-43 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 39. Which of the following is not true about the auditors' verification of notes receivable? AACSB: Analytic 40. To verify that all sales that have been shipped to customers have been recorded, a test of AACSB: Analytic 11-44 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 41. Auditors may use positive and/or negative forms of confirmation requests for accounts AACSB: Analytic 42. The auditors obtain audit evidence for accounts receivable by using positive or negative AACSB: Analytic 11-45 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 43. When scheduling the audit work to be performed on an engagement, the auditors should AACSB: Analytic 44. It is sometimes impossible for the
auditors to use normal accounts receivable confirmation AACSB: Analytic 11-46 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 45. The audit working papers often include a client-prepared, aged trial balance of accounts AACSB: Analytic 46. Which of the following is not a primary
objective of the auditors in the examination of AACSB: Analytic 11-47 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 47. Once a CPA has determined that accounts receivable have increased due to slow AACSB: Analytic 48. Which of the following sets of duties would ordinarily be considered basically AACSB: Analytic 11-48 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 49. Tracing copies of sales invoices to shipping documents will provide evidence that all: AACSB: Analytic 50. Which of the following is the best argument against the use of negative accounts AACSB: Analytic 11-49 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 51. When there are a large number of relatively small account receivable balances, negative AACSB:
Analytic 52. An auditor should perform alternative procedures to substantiate the
existence of accounts AACSB: Analytic 11-50 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 53. The confirmation process may be performed using a(n): A. Option A AACSB: Analytic 54. A CPA examines a sample of copies of December and January sales invoices for the AACSB: Analytic 11-51 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 55. Which of the following is not one of the criteria for revenue recognition? AACSB: Analytic 56. Recognizing a loan received as revenue instead of as a liability has a positive effect on the AACSB: Analytic 11-52 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 57. In your review of ABC Company's
financials, you note that Receivables have increased AACSB: Analytic 58. Which of the following revenue related transactions is not linked to the accounts AACSB: Analytic 11-53 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 59. The individual looking for guidance on revenue recognition is most likely to appropriately AACSB: Analytic 60. An auditor discovered that a client's accounts receivable turnover is substantially lower for AACSB: Analytic 11-54 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 61. Which of the following does not meet the definition of an external confirmation in the AACSB: Analytic 62. Tracing recorded sales transactions in the sales journal to the shipping documents (bills of AACSB: Analytic 11-55 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 63. The auditor determines that both
of the following objectives will be part of the audit of Selection List 11-56 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 5. Which of the following is most likely to increase days' sales in accounts receivable at the 11-57 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 5. E. The requirement is to identify the most likely explanation for an increase in the days' AACSB:
Analytic 11-58 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 64. As part of the fieldwork of an audit engagement, the senior on the audit obtained and Selection list 11-59 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Confirmation Letters Susan's note to file: 11-60 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: 11-61 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: 11-62 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue February 1, year 3 Susan's note to file: February 1, year 3 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 11-64 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Dear Sirs: Susan's note to file: 11-65 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue Selection list AACSB: Analytic 11-66 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 65. Confirmation of accounts receivable is presumptively mandatory audit procedure. In AACSB: Analytic 11-67 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 66. Internal control over sales transactions is very important to the effectiveness of an AACSB: Analytic 11-68 Chapter 11 - Accounts Receivable, Notes Receivable, and Revenue 67. Fraudulent sales are occasionally recorded at year-end as a means of overstating financial AACSB: Analytic 11-69 Which of the following is most likely to increase days sales in accounts receivable at the end of the year for Anthony?Which of the following is most likely to increase days' sales in accounts receivable at the end of the year for Anthony Company? A larger percentage of sales occurred during the last month of the year, as compared to the prior year.
What is likely causing the increase in accounts receivable?Increase in Accounts Receivable → The company's sales are increasingly paid with credit as the form of payment instead of cash. Decrease in Accounts Receivable → The company has successfully retrieved cash payments for credit purchases.
Does accounts receivable increase with sales?Sales growth often comes with increased accounts receivable, both from new customers and from extending more credit to increase business with existing customers.
What is the days sales in receivables quizlet?What is number of days' sales are in receivable? 365 days in a year / accounts receivable turnover.
|