ACC 403 Quiz 7 Chp 14 -15 The document that accompanies the customer’s payment is the: Before goods are shipped on account, a properly authorized person must: Credit memos are normally issued to: Who is generally responsible for opening receipts when a company uses a lockbox to speed the handling of cash receipts? The auditor’s objectives for the sales and cash collections activities when the client is primarily an e-commerce business as compared to a “bricks and mortar” business are: A document prepared to initiate shipment of the goods sold by an independent shipper is the: What event initiates a transaction in the sales and collection cycle? To test for recorded sales for which there were no actual shipments, the auditor vouches from the: Generally, when is the earliest point in the sales and collection cycle in which revenue can be recognized? A document sent to each customer showing his or her beginning accounts receivable balance and the amount and date of each sale, cash payment received, any debit or credit memo issued, and the ending balance is the: What critical event must take place before goods can be shipped in order to assure payment can be reasonably expected? Most companies recognize sales revenue when: Which of the following is not a business function within the “Sales” class of transactions? When an employee who is authorized to make customer entries in the accounts receivable subsidiary ledger, purposefully enters cash received into the wrong customer’s account that employee may be suspected of: The audit procedure referred to as proof of cash receipts is particularly useful to test: In systematic sample selection, the population size is divided by the number of sample items desired in order to determine the: Which of the following is the risk that audit tests will not uncover existing exceptions in a sample? There are three phases in both statistical and nonstatistical sampling. The first phase is to: Attributes sampling is based on the ________ distribution, in which each possible sample in the population has one of two possible values, such as yes or no. The acceptable risk of overreliance: When the auditor decides to select less than 100 percent of the population for testing, the auditor is said to use: Which of the following occurrences would be least likely to warrant further audit attention for the auditor? Which of the following is the risk that an auditor will reach an incorrect conclusion because a sample is not representative of the population? When auditors wish to evaluate a sample statistically, an acceptable selection method is: When the auditor goes through a population and selects items using nonprobabilistic selection methods, without regard to their size, source, or other distinguishing characteristics, it is called: If the auditor decides to assess control risk at the moderate level in a private company audit, when in previous years the auditor set control risk at the maximum level, then tests of controls for the current year would be: The most serious shortcoming of the haphazard sample selection method is: The exception rate the auditor will permit in the population and still be willing to reduce the assessed level of control risk is called the: To determine if a sample is truly representative of the population, an auditor would be required to: Attributes sampling would be an appropriate method to use on which one of the following procedures in an audit program?