MULTIPLE CHOICE: 1. Which of the following may be considered to be a primary objective of the auditor in the examination of accounts receivable? A. Establish validity and collectability of receivables B. Determine the approximate time of collectability of receivables C. Determine the relationship of receivables to sales D. Determine the reasonableness of the sales amount 2. Which of the following is not a procedure used by an auditor in the examination of accounts receivable? A. Confirmation B. Reconciliation C. Inquiry
MULTIPLE CHOICE:
1. Which of the following may be considered to be a primary objective of the auditor in the examination of accounts receivable?
A. Establish validity and collectability of receivables
B. Determine the approximate time of collectability of receivables
C. Determine the relationship of receivables to sales
D. Determine the reasonableness of the sales amount
2. Which of the following is not a procedure used by an auditor in the examination of accounts receivable?
A. Confirmation
B. Reconciliation
C. Inquiry
D. Physical count and inspection
3. In determining validity of accounts receivable, which of the following would the auditor consider most reliable ?
A. Direct telephone communication between the auditor and debtor
B. Confirmation replies received directly from customers
C. Credits to accounts receivable from the
D. Documentary evidence that supports the accounts receivable balance
4. Which of the following forms of evidence represents the most competent evidence that a receivable actually exists?
A. A sales invoice
B. A receiving report
C. A positive confirmation
D. A bill of lading
5. Confirmation which is a specific type of inquiry is the process of obtaining a representation of information or of an existing condition directly from a third party. Two assertions for which confirmation of accounts receivable balances provides primary evidence are:
A. Completeness and valuation
B. Valuation and rights and obligations
C. Existence and completeness
D. Rights and obligations and existence
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