answer the T/F

1. A bill of lading is a written contract between the seller and the buyer. 2. The theft of cash can occur before receipts are entered in the records or after they are entered in the records. 3. The bill of lading is often generated electronically once the goods have been shipped to a customer, and automatically generates the related sales invoice as well as the required entry in the sales journal to record the sale. 4. Misstatements involving the completeness objective for sales lead to overstatements of assets and income. 5. When performing a proof of cash receipts, the auditor will test if the total cash receipts recorded in the cash receipts journal for a given period agree with the actual deposits made to the respective bank account for the same period. A difference found during this test generally signals to the auditor a potential weakness in internal controls. 7 6. The auditor assesses inherent risk for accounts receivable, considering client risk and the nature of the audit client and the nature of the industry which the client is operating in. 7. When allocating the preliminary judgment about materiality for the financial statements, accounts receivable is typically one of the most material accounts in the financial statements for companies selling on credit. 8. The criterion used by most merchandising and manufacturing clients for determining when revenue recognition takes place is whether title to the goods has passed. 9. It is common to use a combination of positive and negative confirmations by sending the latter to accounts with large balances and the former to those with small balances. 10. The confirmations must be mailed by the auditor, but should contain the return address of the client