WorksheetsACC 461 (Thursday, 6/20)
Total questions: 10
Worksheet time: 3hrs 30mins
Which of the following statements is correct regarding the capital acquisition and payment cycle?
Bonds are frequently issued by companies in small amounts
There are relatively few transactions and each transaction is typically highly material
A primary emphasis in auditing debt is on existence
Audit procedures for notes payable and interest income are often performed simultaneously
The capital acquisition and repayment cycle does not include
payment of interest
payment of dividends
payment of vendor invoices
acquisition of capital through interest-bearing debt.
The primary audit objectives to focus on when auditing accounts in the capital acquisition and repayment cycle are
accuracy and completeness
accuracy and existence
completeness and valuation
accuracy and valuation
Performance materiality is often set at a(n) ________ level for notes payable
high
moderate
low
unknown
In the audit of the transactions and amounts in the capital acquisition and repayment cycle, the auditor must take great care in making sure that the significant legal requirements affecting the financial statements have been properly fulfilled and
any violations are reported to the SEC
are adequately disclosed in the financial statements
must issue a disclaimer if they haven't been fulfilled
any departures from the agreements are made with management's knowledge and consent
Which of the following is not a "cash equivalent"?
time deposits
certificates of deposit
money market funds
marketable securities
An imprest petty cash fund
is a bank account
is used for large, unusual purchases
is usually reimbursed at least once a week for good internal control
is being replaced by pre-approved purchase cards in many companies
Companies may purchase marketable securities as a way to temporarily invest excess cash
True
False
Examples of cash equivalents include time deposits, certificates of deposit, and marketable securities.
True
False
Which of the following is likely to be detected as part of the audit of the bank reconciliation?
failure to bill a customer
duplicate payment of a vendor invoice
cash received by the client after year-end, but included in cash receipts in the current year
an embezzlement of cash by intercepting cash receipts from customers before they are recorded
