DeVry ACCT 591 Quiz 4 latest

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DeVry ACCT 591 Quiz 4 latest

Question 1.1.(TCOs B and C) (CPA-02635.B) At December 30, 20X3, Vida Co. had cash of $200,000, a current ratio of 1.5:1 and a quick ratio of .5:1. On December 31, 20X3, all cash was used to reduce accounts payable. How did these cash payments affect the ratios?

Current ratio Quick ratio (Points : 10)

Increased Decreased
Increased No effect
Decreased Increased
Decreased No effect

Question 2.2.(TCOs B and C) (CPA-02310.B) Which of the following circumstances most likely would cause an auditor to suspect that material misstatements exist in a client’s financial statements? (Points : 10)

The assumptions used in developing the prior year’s accounting estimates have changed.
Differences between reconciliations of control accounts and subsidiary records are not investigated.
Negative confirmation requests yield fewer responses than in the prior year’s audit.
Management consults with another CPA firm about complex accounting matters.

Question 3.3.(TCOs B and C) (CPA-05752.B) Which of the following situations most likely could lead to an embezzlement scheme? (Points : 10)

The accounts receivable bookkeeper receives a list of payments prepared by the cashier and personally makes entries in the customers’ accounts receivable subsidiary ledger.
Each vendor invoice is matched with the related purchase order and receiving report by the vouchers payable bookkeeper who personally approves the voucher for payment.
Access to blank checks and signature plates is restricted to the cash disbursements bookkeeper who personally reconciles the monthly bank statement.
Vouchers and supporting documentation are examined and then canceled by the treasurer who personally mails the checks to vendors.

Question 4.4.(TCOs B and C) (CPA-05757.B) As part of the process of observing a client’s physical inventories, an auditor should be alert to: (Points : 10)

The inclusion of any obsolete or damaged goods.
Any change in the method of pricing from prior years.
The existence of outstanding purchases commitments.
The verification of inventory values assigned to goods in process.

Question 5.5.(TCOs B and C) (CPA-02504.B) Which of the following procedures most likely would assist an auditor in determining whether management has identified all accounting estimates that could be material to the financial statements? (Points : 10)

Inquire about the existence of related party transactions.
Determine whether accounting estimates deviate from historical patterns.
Confirm inventories at locations outside the entity.
Review the lawyer’s letter for information about litigation.

Question 6.6.(TCOs B and C) (CPA-02575.B) After determining that a related party transaction has, in fact, occurred, an auditor should: (Points : 10)

Add a separate paragraph to the auditor’s standard report to explain the transaction.
Perform analytical procedures to verify whether similar transactions occurred, but were not recorded.
Obtain an understanding of the business purpose of the transaction.
Substantiate that the transaction was consummated on terms equivalent to an arm’s-length transaction.

Question 7.7.(TCOs B and C) (CPA-02612.B) Which of the following procedures would an auditor most likely perform in searching for unrecorded liabilities? (Points : 10)

Vouch a sample of accounts payable entries recorded just before year-end to the unmatched receiving report file.
Compare a sample of purchase orders issued just after year-end with the year-end accounts payable trial balance.
Vouch a sample of cash disbursements recorded just after year-end to receiving reports and vendor invoices.
Scan the cash disbursements entries recorded just before year-end for indications of unusual transactions.

Question 8.8.(TCOs B and C) (CPA-02495.B) During an audit of an entity’s stockholders’ equity accounts, the auditor determines whether there are restrictions on retained earnings resulting from loans, agreements, or state law. This audit procedure most likely is intended to verify management’s assertions related to: (Points : 10)

Existence.
Completeness.
Valuation and allocation.
Classification and understandability.

Question 9.9.(TCOs B and C) (CPA-02391.B) In performing a count of negotiable securities, an auditor records the details of the count on a security count worksheet. What other information is usually included on this worksheet? (Points : 10)

An acknowledgment by a client representative that the securities were returned intact.
An analysis of realized gains and losses from the sale of securities during the year.
An evaluation of the client’s internal control concerning physical access to the securities.
A description of the client’s procedures that prevent the negotiation of securities by just one person.

Question 10.10.(TCOs B and C) (CPA-04713.B) Analytical procedures performed in the final review stage of an audit generally would include: (Points : 10)

Reassessing the factors that assisted the auditor in deciding on preliminary materiality levels and audit risk.
Considering the adequacy of the evidence gathered in response to unexpected balances identified in planning.
Summarizing uncorrected misstatements specifically identified through tests of details of transactions and balances.
Calculating projected uncorrected misstatements estimated through audit sampling techniques.

 

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DeVry ACCT 591 Quiz 4 latest

Best DeVry ACCT 591 Quiz 4 latest

DeVry ACCT 591 Quiz 4 latest