Finance Questions

Only one of the following four statements, which compare confirmation of accounts payable with suppliers and confirmation of accounts receivable with debtors is false. The false statement is thata. Confirmation of accounts receivable with debtors is a more widely accepted auditing procedures than is confirmation of accounts payable with suppliers.b. Statistical sampling techniques are more widely accepted in the confirmation of accounts payable than in the confirmation of accounts receivable

When using confirmation to provide evidence about completeness assertion for accounts payable, the appropriate population most likely isa. Vendors with whom the entity has previously done business.b. Amounts recorded in the accounts payable subsidiary ledger.c. Payees of checks drawn in the month after the year end.d. Invoices filed in the entity's open invoice file.

The audit procedures used to verify accrued liabilities differ from those employed for the verification of accounts payable becausea. Accrued liabilities usually pertain to services of a continuing nature while accounts payable are the result of completed transactionsb. Accrued liability balances are less material than accounts payable balances.c. Evidence supporting accrued liabilities in nonexistence while evidence supporting accounts payable is readily available.d. Accrued liabilities

Which of the following audit procedures is least likely to detect an unrecorded liability?a. Analysis and recomputation of interest expense.b. Analysis and recomputation of depreciation expense.c. Mailing of standard bank confirmation forms.d. Reading of the minutes of meetings of the board directors.

An auditor performs a test to determine whether all merchandise for which the client was billed was received. The population for this test consists of alla. Merchandise receivedb. Vendors' invoices c. Canceled checksd. Receiving reports

It is an event that creates a legal or constructive obligation because the entity has no other realistic alternative but to settle the obligation a. Obligating event b. Past Event c. Subsequent Event d. Current Event

The auditor is most likely to verify accrued commissions payable in conjunction with thea. Sales cutoff testb. Verification of contingent liabilitiesc. Review of post balance sheet date disbursementsd. Examination of trade accounts payable

An auditor's purpose in reviewing the renewal of a note payable shortly after the balance sheet date most likely is to obtain evidence concerning management's assertions abouta. Existence or occurrence b. Presentation and disclosure c. Completenessd. Valuation or allocation

In auditing accounts payable, an auditor's procedures most likely will focus primarily on management's assertion ofa. Existence or occurrence b. Presentation and disclosurec. Completeness d. Valuation or allocation

An audit assistant found a purchase order for a regular supplier in the amount of P5,500. The purchase order was dated after receipt of goods. The purchasing agent had forgotten to issue purchase order. Also a disbursement of P450 for materials did not have a receiving report. The assistant wanted to select additional purchase orders for investigation but was unconcerned about lack of receiving report. The audit director shoulda. Agree with the assistant because the amount of the purchase orde

Accounting treatment for excess depreciation annual transfer within SOCIE

Costs that are incurred for monitoring and inspecting are: a. prevention costs c. appraisal costs b. detection costs d. failure costs

The final figure in the Schedule of Cost of Goods Manufactured represents the a. cost of goods sold for the period. b. total cost of manufacturing for the period. c. total cost of goods started and completed this period. d. total cost of goods completed for the period.

Costs that are incurred to preclude defects and improper processing are: a. prevention costs c. appraisal costs b. detection costs d. failure costs

Costs that are incurred when customers complain are: a. prevention costs c. appraisal costs b. detection costs d. failure costs

The formula for cost of goods sold for a manufacturer is a. beginning Finished Goods Inventory plus Cost of Goods Manufactured minus ending Finished Goods Inventory. b. beginning Work in Process Inventory plus Cost of Goods Manufactured minus ending Work in Process Inventory. c. direct material plus direct labor plus applied overhead. d. direct material plus direct labor plus overhead incurred plus beginning Work in Process Inventory.

Which of the following replaces the retailing component "Purchases" in computing Cost of Goods Sold for a manufacturing company? a. direct material used b. cost of goods manufactured c. total prime cost d. cost of goods available for sale

The formula to compute cost of goods manufactured is a. beginning Work in Process Inventory plus purchases of raw material minus ending Work in Process Inventory. b. beginning Work in Process Inventory plus direct labor plus direct material used plus overhead incurred minus ending Work in Process Inventory. c. direct material used plus direct labor plus overhead incurred. d. direct material used plus direct labor plus overhead incurred plus beginning Work in Process Inventory

In a perpetual inventory system, the sale of items for cash consists of two entries. One entry is a debit to Cash and a credit to Sales. The other entry is a debit to a. Work in Process Inventory and a credit to Finished Goods Inventory. b. Finished Goods Inventory and a credit to Cost of Goods Sold. c. Cost of Goods Sold and a credit to Finished Goods Inventory. d. Finished Goods Inventory and a credit to Work in Process Inventory

When the number of units manufactured increases, the most significant change in unit cost will be reflected as a(n) a. increase in the fixed element. b. decrease in the variable element. c. increase in the mixed element. d. decrease in the fixed element