Acct 555 HW Week 6
Acct 555 HW Week 6
Chapter 14, pages 468–469: Problems 14-21, 14-22, 14-23, and 14-24
a. The accounting system will not post a sales transaction to the sales journal without a valid bill of lading number. This control is most relevant to which transaction-related objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
467468
b. The accounting system automatically obtains the unit price based on scans of bar codes for merchandise sold. This control is most relevant to which transaction-related objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
c. Which of the following controls would be most effective in detecting a failure to record cash received from customers paying on their accounts?
(1) A person in accounting reconciles the bank deposit to the cash receipts journal.
(2) Transactions recorded in the cash receipts journal are posted on a real-time basis to the accounts receivable master file.
(3) Monthly statements are sent to customers and any discrepancies are resolved by someone independent of cash handling and accounting.
(4) Deposits of cash received are made daily.
d. A key internal control in the sales and collection cycle is the separation of duties between cash handling and record keeping. The objective most directly associated with this control is to verify that
(1) cash receipts recorded in the cash receipts journal are reasonable.
(2) cash receipts are correctly classified.
(3) recorded cash receipts result from legitimate transactions.
(4) existing cash receipts are recorded.
14-22 (Objectives 14-3, 14-4) For each of the following types of misstatements (parts a through d), select the control that should have prevented the misstatement:
a. A manufacturing company received a substantial sales return in the last month of the year, but the credit memorandum for the return was not prepared until after the auditors had completed their testing. The returned
Chapter 14, pages 468–469: Problems 14-21, 14-22, 14-23, and 14-24
a. The accounting system will not post a sales transaction to the sales journal without a valid bill of lading number. This control is most relevant to which transaction-related objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
467468
b. The accounting system automatically obtains the unit price based on scans of bar codes for merchandise sold. This control is most relevant to which transaction-related objective for sales?
(1) Accuracy
(2) Occurrence
(3) Completeness
(4) Posting and summarization
c. Which of the following controls would be most effective in detecting a failure to record cash received from customers paying on their accounts?
(1) A person in accounting reconciles the bank deposit to the cash receipts journal.
(2) Transactions recorded in the cash receipts journal are posted on a real-time basis to the accounts receivable master file.
(3) Monthly statements are sent to customers and any discrepancies are resolved by someone independent of cash handling and accounting.
(4) Deposits of cash received are made daily.
d. A key internal control in the sales and collection cycle is the separation of duties between cash handling and record keeping. The objective most directly associated with this control is to verify that
(1) cash receipts recorded in the cash receipts journal are reasonable.
(2) cash receipts are correctly classified.
(3) recorded cash receipts result from legitimate transactions.
(4) existing cash receipts are recorded.
14-22 (Objectives 14-3, 14-4) For each of the following types of misstatements (parts a through d), select the control that should have prevented the misstatement:
a. A manufacturing company received a substantial sales return in the last month of the year, but the credit memorandum for the return was not prepared until after the auditors had completed their testing. The returned