Identify whether the following tests are tests of controls, substantive analytical procedures, tests of details of transactions, or tests of details of account balances.1) Select a sample of customer receivables and send positive confirmations to each customer.2) Examine monthly bank reconciliations for the internal auditors' initials indicating internal verification and review of the reconciliation.3) Select a sample of entries in the sales journal and trace each to the shipping documents.4) Compute receivable turnover and compare with previous years.5) For a sample of new customers, determine whether credit approval was properly administered and documented.6) Compare the dates on a sample of sales invoices with the dates of shipment and the dates the transactions were recorded in the
sales journal.
What will be an ideal response?
1) Tests of details of account balances
2) Tests of controls
3) Tests of details of transactions
4) Substantive analytical procedures
5) Tests of controls
6) Tests of details of transactions
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A public corporation filing a quarterly tax report would be providing
A) a progress report. B) a compliance report. C) a justification report. D) a periodic operating report. E) a policy and procedure report.
The Financial Accounting Standards Board (FASB) has expressed a strong preference for the indirect method, but allows companies to use the direct method in calculating the cash flow from operating activities
a. True b. False Indicate whether the statement is true or false
Which one of the following would require interperiod tax allocation?
A) percentage depletion in excess of cost depletion B) premiums paid on a life insurance policy of which the company is the beneficiary C) interest on state municipal bonds D) investment income recognized by the equity method for accounting purposes but as income when received for tax purposes
What assumptions are made in calculating the economic order quantity? Which of these assumptions is the least realistic? Why?
What will be an ideal response?