Chapter 6 Gleim

Question 1

in updating a computerized AR file, the total used as a batch control to verify the accuracy of posting cash remittances is

Answer 1

cash deposits plus discounts taken by customers

Question 2

the purpose of sending a standard confirmation request to all banks the client does business with is

Answer 2

to seek info about other deposit and loan amounts that come to the attention of the institution

Question 3

a confirmation should be signed by __________ and sent by ___________

Answer 3

the client; the auditor

Question 4

an auditor should test bank transfers for the last part of the audit period and the first part of the subsequent period to detect whether

Answer 4

cash balances were overstated because of kiting

Question 5

what represents a misstatement of cash at year-end?

Answer 5

both parts of a bank transfer are recorded in separate months in the books

Question 6

the best evidence regarding year-end bank balances is documented in the

Answer 6

bank reconciliations

Question 7

what two sets of info does the auditor usually confirm on one form?

Answer 7

cash in bank and collateral for loans

Question 8

when counting cash on hand, the auditor must exercise control over all cash and other negotiable assets to prevent:

Answer 8

substitution

Question 9

the standard AICPA form to fin. institutions requesting information on direct liabilities on loans asks for the following information:

Answer 9

• description of collateral
• date through which interest is paid

Question 10

which internal control could detect an error of neglecting to account for wire transfers?

Answer 10

performing monthly reconciliations of all bank accounts