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CPA AUD Flashcards > AUD 3 Internal Control 17 - 2 Operating Cycles - Production and Conversion Cycle > Flashcards

AUD 3 Internal Control 17 - 2 Operating Cycles - Production and Conversion Cycle Flashcards

1
Q

Production and Conversion Cycle

The production and conversion cycle deals with manufacturing operations.

Most of the controls are similar to those in the purchasing and spending cycle, since inventory may be involved in both cycles, the difference being whether they were manufactured or purchased.

Acquisition of, and accounting for, raw materials purchased in a manufacturing process would be similar to merchandise inventory in a nonmanufacturing entity.

Examples of controls related to the management assertions for manufactured inventory include:

  • Presentation and Disclosure
  • Existence or Occurrence
  • Completeness and Cutoff
  • Valuation, Allocation and Accuracy
A

Production and Conversion Cycle

The production and conversion cycle deals with manufacturing operations.

Most of the controls are similar to those in the purchasing and spending cycle, since inventory may be involved in both cycles, the difference being whether they were manufactured or purchased.

Acquisition of, and accounting for, raw materials purchased in a manufacturing process would be similar to merchandise inventory in a nonmanufacturing entity.

Examples of controls related to the management assertions for manufactured inventory include:

  • Presentation and Disclosure
  • Existence or Occurrence
  • Completeness and Cutoff
  • Valuation, Allocation and Accuracy
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2
Q

Production and Conversion Cycle

Examples of controls related to the management assertions for manufactured inventory include:

  • Presentation and Disclosure
  • Existence or Occurrence
  • Completeness and Cutoff
  • Valuation, Allocation and Accuracy

• Presentation and Disclosure
– Direct labor charged to individual time tickets is compared to the total direct labor charged to work-in-process, in order to ensure direct labor costs have not been charged to manufacturing overhead.

• Existence or Occurrence
– Perpetual inventory records are compared with goods on hand.

• Completeness and Cutoff
– Forms used for material requisitions are prenumbered and periodically accounted for.

• Valuation, Allocation and Accuracy
– Subsidiary records are periodically reconciled to inventory control accounts.

A

Production and Conversion Cycle

Examples of controls related to the management assertions for manufactured inventory include:

  • Presentation and Disclosure
  • Existence or Occurrence
  • Completeness and Cutoff
  • Valuation, Allocation and Accuracy

• Presentation and Disclosure
– Direct labor charged to individual time tickets is compared to the total direct labor charged to work-in-process, in order to ensure direct labor costs have not been charged to manufacturing overhead.

• Existence or Occurrence
– Perpetual inventory records are compared with goods on hand.

• Completeness and Cutoff
– Forms used for material requisitions are prenumbered and periodically accounted for.

• Valuation, Allocation and Accuracy
– Subsidiary records are periodically reconciled to inventory control accounts.

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3
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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4
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

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5
Q

Production and Conversion Cycle

Using the mnemonic RACE for ac_______ balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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6
Q

Production and Conversion Cycle

Using the mnemonic RACE for account ba_____s:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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7
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • R_____ and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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8
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and o_________
  • Allocation and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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9
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • A________ and Valuation
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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10
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and V________
  • Completeness
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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11
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • C__________
  • Existence
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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12
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • E________
A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
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13
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

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14
Q

Production and Conversion Cycle

• R______ and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

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15
Q

Production and Conversion Cycle

• Rights and o_______

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

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16
Q

Production and Conversion Cycle

• Rights and obligations

– Te__s of notes,

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes,

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17
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of n___s, lines of credit,

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit,

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18
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, l___s of credit, and other debt instruments

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

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19
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of cr__it, and other debt instruments

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

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20
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other d__t instruments

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments

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21
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt ins________s are evaluated

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

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22
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are ev_____ed to determine

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine

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23
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to det_______ if inventories have been pledged as collateral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

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24
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if in______es have been pledged as collateral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

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25
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pl__ged as collateral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

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26
Q

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as co______ral.

A

Production and Conversion Cycle

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated

to determine if inventories have been pledged as collateral.

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27
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Rights and obligations

– Terms of notes, lines of credit, and other d___ inst______s are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

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28
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Allo_____ and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

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29
Q

Production and Conversion Cycle

• Allocation and V________

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

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30
Q

Production and Conversion Cycle

• Allocation and Valuation

– All_______s of salaries and wages

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages

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31
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of s____ies and wages

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages

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32
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and w__es to inventory

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory

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33
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to in______ry are reviewed

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

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34
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are rev___ed

to make certain appropriate amounts are included.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

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35
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make cert___ appropriate amounts are included.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

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36
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain app_______ amounts are included.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

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37
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate am____s are included.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

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38
Q

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are in___ded.

A

Production and Conversion Cycle

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed

to make certain appropriate amounts are included.

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39
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Allocation and Valuation

– Allo______s of salaries and wages to in____ry are reviewed to make certain appropriate amounts are included.

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

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40
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

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41
Q

Production and Conversion Cycle

• Com________

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

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42
Q

Production and Conversion Cycle

• Completeness

– Fo__s used for the acquisition of raw materials

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

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43
Q

Production and Conversion Cycle

• Completeness

– Forms u__d for the acquisition of raw materials

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

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44
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acq_______ of raw materials

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials

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45
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of r__ materials and other items

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items

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46
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw m_______s and other items are prenumbered

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

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47
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other it__s are prenumbered

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

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48
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are pren______ed

and all numbers are accounted for.

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

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49
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all nu____s are accounted for.

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

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50
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are acc____ed for.

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

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51
Q

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and a__ numbers are accounted for.

A

Production and Conversion Cycle

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered

and all numbers are accounted for.

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52
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are pren_____ed and all numbers are ac_____ed for.

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

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53
Q

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

54
Q

Production and Conversion Cycle

• Exi______

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

55
Q

Production and Conversion Cycle

• Existence

– Perpetual inv_____y records

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records

56
Q

Production and Conversion Cycle

• Existence

– Per_____ inventory records

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records

57
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory re____s are regularly reconciled

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled

58
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly re____iled to goods in inventory

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

59
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to g__ds in inventory

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

60
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in in_____ory

to make certain that

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that

61
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make cer___n that recorded amounts are still on hand.

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

62
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that re___ed amounts are still on hand.

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

63
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded am____s are still on hand.

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

64
Q

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on h__d.

A

Production and Conversion Cycle

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory

to make certain that recorded amounts are still on hand.

65
Q

Production and Conversion Cycle

Using the mnemonic R__E for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

A

Production and Conversion Cycle

Using the mnemonic RACE for account balances:

• Rights and obligations
– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

• Allocation and Valuation
– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

• Completeness
– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

• Existence
– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

66
Q

Production and Conversion Cycle

As with the pur____ing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

67
Q

Production and Conversion Cycle

As with the purchasing and s____ing cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

68
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the ob____ives within the production and conversion cycle include properly recording and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

69
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the pro_______ and conversion cycle include properly recording and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

70
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and co________ cycle include properly recording and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

71
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly re____ing and executing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

72
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and ex____ing transactions.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

73
Q

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing trans______s.

A

Production and Conversion Cycle

As with the purchasing and spending cycle,

the objectives within the production and conversion cycle include properly recording and executing transactions.

74
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include pro___ly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

75
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly re____ing and ex____ing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

76
Q

Production and Conversion Cycle

In addition, an especially difficult ob______ve of internal control

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control

77
Q

Production and Conversion Cycle

In addition, an especially di______lt objective of internal control

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control

78
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal con____ with respect to manufacturing processes

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

79
Q

Production and Conversion Cycle

In addition, an especially difficult objective of int_____ control with respect to manufacturing processes

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

80
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to ma_______ring processes

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

81
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing p______ses

is maintaining proper custody as raw materials

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials

82
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is mai_____ing proper custody as raw materials

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials

83
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper c___ody as raw materials become work-in-process

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

84
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining pr___r custody as raw materials become work-in-process

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

85
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as r__ materials become work-in-process

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

86
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-pro____

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

87
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become w__k-in-process

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process

88
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw m_____als become work-in-process and then finished goods.

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

89
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then fi____ed goods.

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

90
Q

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished g__ds.

A

Production and Conversion Cycle

In addition, an especially difficult objective of internal control with respect to manufacturing processes

is maintaining proper custody as raw materials become work-in-process and then finished goods.

91
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult ob_____ of internal co_____ with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

92
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is mai_____ing proper c______y as raw materials become work-in-process and then finished goods.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

93
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw ma_____ls become w__k-in-process and then f__ished goods.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

94
Q

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to ma_______ing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

A

Production and Conversion Cycle

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

95
Q

Production and Conversion Cycle

In contrast, in_______y in a merchandising company

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company

96
Q

Production and Conversion Cycle

In contrast, inventory in a mer______sing company normally only goes from the receiving department to inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

97
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the re____ing department to inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

98
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only g_es from the receiving department to inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

99
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving dep______ to inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

100
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally o__y goes from the receiving department to inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory

101
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inv_____y when acquired

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

102
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when ac__ired

and then from inventory

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory

103
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from in______y to the shipping department when sold.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

104
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the s___ping department when sold.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

105
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when s__d.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

106
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the re____ing department to inventory when ac___red

and then from inventory to the shipping department when sold.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

107
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from in____ory to the s____ing department when sold.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

108
Q

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

A

Production and Conversion Cycle

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

109
Q

“Terms of debt instruments are evaluated to determine if inventories have been pledged as collateral.”

Referred to which mnemonic RACE for account balances?

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

110
Q

” Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.”

Referred to which mnemonic RACE for account balances?

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

• Existence

– Perpetual inventory records are regularly reconciled to goods in inventory to make certain that recorded amounts are still on hand.

111
Q

“Forms used for the acquisition of raw materials are prenumbered and all numbers are accounted for.”

Referred to which mnemonic RACE for account balances?

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

• Completeness

– Forms used for the acquisition of raw materials and other items are prenumbered and all numbers are accounted for.

112
Q

“Allocations of salaries to inventory are reviewed to make certain appropriate amounts are included.”

Referred to which mnemonic RACE for account balances?

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

• Allocation and Valuation

– Allocations of salaries and wages to inventory are reviewed to make certain appropriate amounts are included.

113
Q

“Terms of notes are evaluated to determine if inventories have been pledged as collateral.”

Referred to which mnemonic RACE for account balances?

  • Rights and obligations
  • Allocation and Valuation
  • Completeness
  • Existence
A

• Rights and obligations

– Terms of notes, lines of credit, and other debt instruments are evaluated to determine if inventories have been pledged as collateral.

114
Q

What are the control objectives within the production and conversion cycle?

A

What are the control objectives within the production and conversion cycle?

Answer: Properly recording and executing transactions.

As with the purchasing and spending cycle, the objectives within the production and conversion cycle include properly recording and executing transactions.

115
Q

What are the control objectives within the production and conversion cycle?

Properly re____ing and executing transactions.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

116
Q

What are the control objectives within the production and conversion cycle?

Properly recording and ex____ing transactions.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

117
Q

What are the control objectives within the production and conversion cycle?

Properly recording and executing ___________.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

118
Q

What are the control objectives within the production and conversion cycle?

Properly _________ and executing transactions.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

119
Q

What are the control objectives within the production and conversion cycle?

Properly recording and __________ transactions.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

120
Q

What are the control objectives within the production and conversion cycle?

________ recording and executing transactions.

A

What are the control objectives within the production and conversion cycle?

Properly recording and executing transactions.

121
Q

What is the internal control objective with respect to manufacturing processes?

A

What is the internal control objective with respect to manufacturing processes?

Answer: Maintaining proper custody

(Raw materials become work-in-process and then finished goods.)

In addition, an especially difficult objective of internal control with respect to manufacturing processes is maintaining proper custody as raw materials become work-in-process and then finished goods.

122
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining proper _________

(as raw materials become work-in-process and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

123
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining _______ custody

(as raw materials become work-in-process and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

124
Q

What is the internal control objective with respect to manufacturing processes?

_________ proper custody

(as raw materials become work-in-process and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

125
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as ___ materials become work-in-process and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

126
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw _________ become work-in-process and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

127
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become _______________ and then finished goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

128
Q

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then _________ goods.)

A

What is the internal control objective with respect to manufacturing processes?

Maintaining proper custody

(as raw materials become work-in-process and then finished goods.)

129
Q

How does inventory travel at acquisition for merchandising company?

A

How does inventory travel at acquisition for merchandising company?

Answer: Inventory goes from the receiving department to inventory when acquired

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired and then from inventory to the shipping department when sold.

130
Q

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

A

In contrast, inventory in a merchandising company normally only goes from the receiving department to inventory when acquired

and then from inventory to the shipping department when sold.

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

131
Q

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

A

Merchandising company

Acquired inventory
- from Receiving dept. to Inventory

Sold inventory
- from Inventory to Shipping dept.

CPA AUD Flashcards (62 decks)

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