Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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It is inefficient to record all cash receipts in a general journal.
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A voucher system is an example of an internal control procedure over cash payments.
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Discuss why control over receivables is not quite as important as control over cash
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- Suppose we collected cash from a charge customer and the debit was to Cash and the credit to Sales. How and when would this error be discovered?arrow_forward30) Which scheme is considered to be skimming? A. Unrecorded sales. B. Understated sales. C. Theft of incoming unrecorded cash. D. Swapping checks for cash.arrow_forwardPixel Copies recorded a cash collection on account by debiting Cash and crediting Accounts Payable. What will the trial balance show for this error? Cash is overstated Liabilities are overstated Expenses are overstated The trial balance will not balancearrow_forward
- Which of the following is a good internal control for cash payments? A.Payments to suppliers should be made as quickly as possible B.An experienced accountant should have total responsibility for all cash payment functions. C.Payments should be authorised before they are made D.Supporting documentation should be destroyed immediately after payment to avoid incorrectly twice.arrow_forwardAssess the following statement as true or false. Enter T for true or F for false. 1. 2. 3. 4. Bank reconciliation is one of documentation procedure control. A cash budget contributes to more effective internal control. of segregation of duties. 5. to apply. Allow only one check signer has access to cash recording is an example The assumption of inventory method (i.e. FIFO etc.) may not match the physical flow of goods. Technology has make the perpetual inventory more popular and easierarrow_forwardAfter removing the Change Fund, a cash shortage exists if: a.the Petty Cash Fund is greater than the Change Fund. b.the Change Fund is greater than the Petty Cash Fund. c.the day's receipts are greater than the register reading. d.the day's receipts are less than the register reading.arrow_forward
- Which of the following is an effective internal control for cash payments? A.Payments should be authorised before they are made B.Payments to suppliers should be made as quickly as possible C.An experienced accountant should have total responsibility for all cash payment functions D.Supporting documentation should be destroyed immediately afterpayment to avoid incorrectly paying twicearrow_forwardExplain why speeding up the collection of accounts receiv-able provides only a one-time increase in cash receipts.arrow_forwardIf a petty cash account is short and the fund is replenished, then the account that would be debited is the expense account Cash Over and Short. Select one: True Falsearrow_forward
- A cash payment under a good control system will have. a. Too much amount Bank book balance b. Appointing different persons to authorize the payment and sign the cheques c. Too much amount book balance d. Maintaining minimum bank book balancearrow_forwardA T-account for Cash cannot contain any credits. True Falsearrow_forwardExplain potential misstatements - cash receipt and the description of of misstatements. The Recording fictitious cash receipts, Failure to record receipts from cash sales, Failure to record cash from collection of accounts receivable and Early (late) recognition of cash receipts "cutoff problems"arrow_forward
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