1.Which of the following business functions fall under the cycle of purchase and payment? a. Purchase order procedure b. Receive purchased goods and services c. Debt acknowledgment d. Disbursement processing and recording using cash to pay e. All the answers are correct

2. When the auditors make the comparison of the sales returns and the discounts as a percentage of gross sales with previous years then a A possible error is that accounts payable that are uncollectible have not been recorded in the accounting books.

a. true b. False

3. When the auditors have performed substantive analytical tests or procedures, and they have given favorable results, then the extent to which the auditor needs to perform tests of details on accounts related to any audit cycle.

a. true

b. False

4. The tests carried out on accounts receivable are based on the procedures of auditor's risk assessment.

a. true

b. False

5. Accounts that require more time to verify through substantive testing of the balance details are accounts payable, accounts receivable, inventory, fixed assets, and expense accounts.

a. true

b. False

6.Sample sizes for accounts payable tests may vary considerably, depending on factors such as:

a. The results of the previous year

b. Planned control risk

c. Outstanding Account Numbers

d. The materiality of accounts payable

7. The methodology for designing tests of control and substantive tests of transactions in the purchase and payment cycle includes

a. Understand the internal control of the cycle

b. Assess planned control risk

c. Determine the scope of tests on controls

d. All the answers are correct

e. None of the answers is correct

8.The use of analytical procedures is important in the procurement and payment cycle as in any other cycle, especially to discover errors in the

a. accounts receivable

b. Debts to pay

c. Cash

d. Administrative staff salary expenses

e. All of the above

9. The cycle that takes the most time to evaluate in the field work is

a. Acquisition and payment cycle

b. Cash cycle and financial instruments

c. Human resources and personnel cycle

d. Inventory and warehouse cycle

e. None of the above

10. The auditor uses the evaluation of the ___________________ and the results of ______________________to determine the planned detection risk and the related substantive tests for the audit of financial statements. a.  control risk, tests of control b.  audit risk, balance tests c.  control risk, balance tests d.  audit risk, tests of control e. None of the above