Terms in this set (57)

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1) The two primary classes of transactions in the sales and collection cycle are: A) sales and sales discounts. B) sales and cash receipts. C) sales and sales returns. D) sales and accounts receivable.

B) sales and cash receipts.

2) The appropriate and sufficient evidence to be obtained from tests of details must be decided on an: A) efficiency basis. B) effectiveness basis. C) audit objectives basis. D) none of the above.

C) audit objectives basis.

3) Auditors are especially concerned with three aspects of internal control for the sales and collection cycle. Which of the following is not one of their major concerns? A) Controls over cutoff B) Controls that prevent or detect embezzlements C) Controls over sales discounts D) Controls related to the allowance for uncollectible accounts

C) Controls over sales discounts

4) For sales, the occurrence transaction-related audit objective affects which of the following balance-related audit objective? A) Existence B) Completeness C) Rights D) Detail tie-in

A) Existence

5) For cash receipts, the occurrence transaction-related audit objective affects which of the following balance-related audit objective? A) Existence B) Completeness C) Rights D) Detail tie-in