CMPC 312 QUIZ 2 QUESTIONS WITH
CORRECT ANSWERS
When the auditor discovers material misstatements in the accounting records, the FS
must be corrected, but the client must approve them, because management has
primary responsibility for the fair presentation statements - Answer-Proposed Adjusting
and Reclassifying Entries
Working paper to combine similar accounts - Answer-Lead Schedule
Largest portion of working papers includes the detailed schedules prepared by auditors
in support of specific amounts on the financial statements. - Answer-Supporting
Schedules
These are the test of controls in the revenue/sales cycle, except:
a) Selling (Authorization)
b) Purchasing (Authorization)
c) Delivery (Custody)
d) Accounting (Recording)
e) Collection - Answer-b) Purchasing (Authorization)
These are the test of controls in the purchase/disbursement cycle, except:
a) Purchasing (Authorization)
b) Receipt of goods (Custody)
c) Collection
d) Accounting (Recording)
e) Disbursement - Answer-c) Collection
designed to ensure safe custody - Answer-Inventory Controls
It can be very important in audit because of the high value of inventory or the complexity
of its audit - Answer-Inventory System
Key controls over payroll cycle, except:
a) Disbursement
b) Documentation and authorization of staff changes
c) Calculation of wages and salaries
d) Payment of wages
e) Authorization of deductions - Answer-a) Disbursement
CORRECT ANSWERS
When the auditor discovers material misstatements in the accounting records, the FS
must be corrected, but the client must approve them, because management has
primary responsibility for the fair presentation statements - Answer-Proposed Adjusting
and Reclassifying Entries
Working paper to combine similar accounts - Answer-Lead Schedule
Largest portion of working papers includes the detailed schedules prepared by auditors
in support of specific amounts on the financial statements. - Answer-Supporting
Schedules
These are the test of controls in the revenue/sales cycle, except:
a) Selling (Authorization)
b) Purchasing (Authorization)
c) Delivery (Custody)
d) Accounting (Recording)
e) Collection - Answer-b) Purchasing (Authorization)
These are the test of controls in the purchase/disbursement cycle, except:
a) Purchasing (Authorization)
b) Receipt of goods (Custody)
c) Collection
d) Accounting (Recording)
e) Disbursement - Answer-c) Collection
designed to ensure safe custody - Answer-Inventory Controls
It can be very important in audit because of the high value of inventory or the complexity
of its audit - Answer-Inventory System
Key controls over payroll cycle, except:
a) Disbursement
b) Documentation and authorization of staff changes
c) Calculation of wages and salaries
d) Payment of wages
e) Authorization of deductions - Answer-a) Disbursement
