15 Questions
Which of the following is not an assertion related to the test of controls over sales and receivables?
Accuracy and Timeliness
What method is not used to obtain information concerning specific controls over sales transactions?
Confirmation
Which activity is not part of the business activities under sales transactions?
Posting to general ledger
What is not a test of controls over sales and receivables?
Reconciling sales records with general ledger
Which control activity is not part of the controls test of sales transactions?
Approval of sales by senior management
Which of the following is not an assertion related to sales and receivables?
Rights and Privileges
What is not a method for obtaining information concerning specific controls over sales transactions?
Reconciliation
Which of the following is a test of control for completeness of sales transactions?
Inspecting report on the last shipments that the shipping clerk sends to the billing clerk
What is a test of control for rights and obligations regarding sales transactions?
Checking sales orders and sales invoices for terms to determine that transaction is a sale rather than a consignment
What is a test of control for valuation or allocation of sales?
Counting and comparing goods shipped with sales orders and shipping documents prior to shipping
What is a test of control for presentation and disclosure of sales and accounts receivable?
Determining that the invoice copy contains the signature that indicated approval on account classifications used
What is a test of control for ensuring timely recording of sales and proper cut-off?
Inspecting report on the last shipments that the shipping clerk sends to the billing clerk
What is a test of control for customer credit approval prior to merchandise shipment?
Examining a sample of sales order for credit approval prior to shipment
What is a test of control for proper pricing, mathematical accuracy, and terms on sales invoices?
Checking sales orders and sales invoices for terms to determine that transaction is a sale rather than a consignment
What is a test of control for balancing the accounts receivable subsidiary ledger to the general ledger control account?
Fooling the account receivable subsidiary ledger and comparing the total with the balance appearing in the general ledger control account
Test your knowledge of internal control over sales transactions with this quiz. Explore the audit process for accepting, approving, filling, shipping, and billing sales orders, and learn about specific controls through inquiry, observation, and review of documentation.
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