AUDIT OF RECEIVABLE THEORIES

The purpose of test of controls over billing is to determine whether

• shipments are billed

  
  

• billed goods have been shipped

• billing department personnel are competent

• credit is approved before goods are shipped

Proper authorization of write-offs of uncollectibles should be approved in which of the

following department?

• .Accounts Receivable

• Accounts Payable

• Credit

• Treasurer

An auditor's purpose in reviewing credit ratings of customers with deliquent accounts

receivable most likely is to obtain evidence concerning management's assertion about

• Existence and occurence

• Presentation and disclosure

• Valuation or allocation

• Rights and obligations

The purpose of tests of controls over shipping is to determine whether

A.Billed goods have been shipped

• Billed goods have been shipped

• Shipments are billed

• Shipping department personnel are competent

• Credit is approved before goods are shipped

To conceal defalcation involving receivables, the auditor would expect an experienced

bookkeeper to charge which of the following accounts

• Sales return

• Miscellaneous expense

• Petty cash

• Miscellaneous income

Which of the following is not a balance-related audit objective evaluated in the audit of accounts receivable?

• Accuracy

• Completeness

• Occurrence

• Rights

Tests of which balance-related audit objective are normally performed first in an audit of the sales and collection?

• Completeness

• Accuracy

• Rights

• Detail tie-in

For most audits, inherent risk for accounts receivable is moderate or low except for which balance-related audit objectives?

• Timing and realizable value.

• Completeness and existence.

• Realizable value and cutoff

• Existence and accuracy

.An auditor's purpose in reviewing credit ratings of customers with deliquent accounts

receivable most likely is to obtain evidence concerning management's assertion about

• Valuation or allocation

• .Presentation and disclosure

• Existence and occurence

• Rights and obligations

An aged trial balance of accounts receivable is usually used by the auditor to

• Evaluate type of provision for bad debt expense

• Verify the validity of recorded receivables

• .Ensure that all accounts are promptly credited

• Evaluate the results of compliance test