Auditing A Risk Based Approach 11th Edition By Johnstone – Test Bank

1. The acquisition and payment cycle includes processes for identifying products or services to be acquired, purchasing goods and services, receiving the goods, approving payments, and paying for goods and services received. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Acquisition and Payment Cycle
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
2. The major accounts in the acquisition and payment cycle are inventory, cost of goods sold, accounts payable, and other expense accounts. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Acquisition and Payment Cycle
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
3. An indication of potential inventory fraud is that inventory levels are growing faster than sales. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-05
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Fraud Risks
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
4. The acquisition process begins with a purchase of goods or services.
a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Acquisition and Payment Cycle
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
5. Supply chain management has helped many companies improve the efficiency of operations. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Supply Chain Management
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
6. Management may intentionally misstate inventory balances by overvaluing items that are obsolete. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-03
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Fraud Risks
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
7. Understatement of either purchases or ending inventory will result in a lower cost of goods sold and higher net income. a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
AUDI.JOHN.18.11-03
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Fraud Risks
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
8. Inventory turnover is often calculated by the auditor for proper disclosure in client financial statements. a. True
b. False
ANSWER: False
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-05
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Analytical Procedures
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
9. A networked software system linking a company’s information system to vendors whose offerings and prices have been preapproved by appropriate management is called an automated purchasing system. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-01
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Acquisition and Payment Cycle
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM
10. Cycle counts involve periodic testing of the accuracy of the perpetual inventory records. a. True
b. False
ANSWER: True
POINTS: 1
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: AUDI.JOHN.18.11-04
NATIONAL STANDARDS: United States – BUSPROG: Comprehension
STATE STANDARDS: United States – AK – AACSB-Analytical skills
United States – AK – AICPA BB-Critical thinking
TOPICS: Internal Controls in the Acquisition and Payment Cycle
DATE CREATED: 1/25/2018 8:13 PM
DATE MODIFIED: 1/25/2018 8:13 PM