CPA Exam Sample Questions Pt. 2

Question

Which of the following is not a principal objective of the auditor in the examination of revenues?

Answer 1

To verify cash deposited during the year.

Answer 2

To evaluate internal control, with particular emphasis on the use of accrual accounting to record revenue.

Answer 3

To verify that earned revenue has been recorded, and recorded revenue has been earned.

Answer 4

To identify and interpret significant trends and variations in the amounts of various categories of revenue.

Answer 5

Compare shipping documents with sales records.

Answer 6

Apply gross profit rates to inventory disposed of during the period.

Answer 7

Trace payments received subsequent to the balance sheet date.

Answer 8

Send accounts receivable confirmation requests.

Answer 9

Unrecorded credit sales in 1980.

Answer 10

Unrecorded cash receipts in 1979.

Answer 11

More thorough credit investigations made by the company late in 1979.

Answer 12

Fictitious sales in 1980.

Answer 13

Examination of canceled checks clearing in the bank cut-off period.

Answer 14

Confirming year-end bank balances.

Answer 15

Preparing a schedule of interbank transfers.

Answer 16

Investigating responses to accounts receivable confirmations.

Answer 17

Strong, and the individuals receiving the confirmation requests are unlikely to give them adequate consideration.

Answer 18

Weak, and the individuals receiving the confirmation requests are likely to give them adequate consideration.

Answer 19

Weak, and the individuals receiving the confirmation requests are unlikely to give them adequate consideration

Answer 20

Strong, and the individuals receiving the confirmation requests are likely to give them adequate consideration.

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