AUD589 QUIZ EXPENSE CYCLE

What does the expenses cycle begin with?

• Payment of bills

• Authorization by auditor

• Incurring an obligation for services or goods

• Financial statement preparation

Which of the following is a class of transaction in the expenses cycle?

• Revenue recognition

• Recognition of expenses

• Loan issuance

• Share capital issuance

An invoice dated 30 December recorded in January is an error in..

• Occurrence

• Completeness

• Classification

• Cut-off

Which of these is a possible misstatement?

• Revenue recorded in correct period

• Properly matched invoices and payment

• Understatement of liabilities

• Accurate account codes used

What is the purpose of a test of control?

• To detect fraud

• To identify revenue leaks

• To test the effectiveness of internal controls

• To prepare tax statement

An expense recorded under the wrong account affects which assertion?

• Cut-off

• Accuracy

• Classification

• Occurrence