Internal Control over Sales Transactions Quiz
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Questions and Answers

Which of the following is not an assertion related to the test of controls over sales and receivables?

  • Existence or Occurrence
  • Rights and Obligations
  • Completeness
  • Accuracy and Timeliness (correct)

What method is not used to obtain information concerning specific controls over sales transactions?

  • Observation
  • Confirmation (correct)
  • Review of documentation
  • Inquiry

Which activity is not part of the business activities under sales transactions?

  • Billing customers
  • Accepting sales order
  • Posting to general ledger (correct)
  • Approving credit

What is not a test of controls over sales and receivables?

<p>Reconciling sales records with general ledger (C)</p> Signup and view all the answers

Which control activity is not part of the controls test of sales transactions?

<p>Approval of sales by senior management (C)</p> Signup and view all the answers

Which of the following is not an assertion related to sales and receivables?

<p>Rights and Privileges (D)</p> Signup and view all the answers

What is not a method for obtaining information concerning specific controls over sales transactions?

<p>Reconciliation (C)</p> Signup and view all the answers

Which of the following is a test of control for completeness of sales transactions?

<p>Inspecting report on the last shipments that the shipping clerk sends to the billing clerk (B)</p> Signup and view all the answers

What is a test of control for rights and obligations regarding sales transactions?

<p>Checking sales orders and sales invoices for terms to determine that transaction is a sale rather than a consignment (B)</p> Signup and view all the answers

What is a test of control for valuation or allocation of sales?

<p>Counting and comparing goods shipped with sales orders and shipping documents prior to shipping (B)</p> Signup and view all the answers

What is a test of control for presentation and disclosure of sales and accounts receivable?

<p>Determining that the invoice copy contains the signature that indicated approval on account classifications used (A)</p> Signup and view all the answers

What is a test of control for ensuring timely recording of sales and proper cut-off?

<p>Inspecting report on the last shipments that the shipping clerk sends to the billing clerk (A)</p> Signup and view all the answers

What is a test of control for customer credit approval prior to merchandise shipment?

<p>Examining a sample of sales order for credit approval prior to shipment (D)</p> Signup and view all the answers

What is a test of control for proper pricing, mathematical accuracy, and terms on sales invoices?

<p>Checking sales orders and sales invoices for terms to determine that transaction is a sale rather than a consignment (C)</p> Signup and view all the answers

What is a test of control for balancing the accounts receivable subsidiary ledger to the general ledger control account?

<p>Fooling the account receivable subsidiary ledger and comparing the total with the balance appearing in the general ledger control account (A)</p> Signup and view all the answers

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