Review Mods 1-5

Question 0

Not including a sale in 20X2 sales, has what affect on accounts receivable turnover for 20X2?

Answer 0

Increases accounts receivable turnover ratio for 20X2

Because numerator and denominator decrease by the same
Amount

Question 1

What affect does including items on consignment as sales have on the Accounts receivable turnover ratio?

Answer 1

Decreases the ratio, by equally increasing sales and receivables

Question 2

Higher interest rates on refinancing…

Answer 2

Decrease profits

Question 3

A cash shortage may be concealed by transporting funds from one location to another or by converting negotiable assets to cash. Because of this which of the following is vital?

Answer 3

Simultaneous verification

Question 4

The scope of an audit is not restricted when an attorney’s response to an auditor as a result of a client’s letter of audit inquiry limits response to…

Answer 4

Matters to which the attorney has given substantive attention
In the form of legal representation

Question 5

If the entity’s footnotes include a footnote on a related party transactions stating that the equivalent party transaction occurred on terms equivalent to those that would have prevailed in an arm’s length transaction. This would cause an…

Answer 5

auditor to modify an unqualified opinion

Question 6

2 audit procedures used to gather evidence on balance per bank

Answer 6

1 confirmation directly with bank

2 trace items on bank reconciliation to cutoff statement

Question 7

What audit procedure should be performed to investigate a customer note collected by the bank?

Answer 7

Inspect bank credit memo

Question 8

When an error for a check occurs, with the bank account being overcharged by the bank, what 2 audit procedures should be performed?

Answer 8

1 Inspect bank credit memo

2 trace items on the bank reconciliation to the cutoff statement

Question 9

When financial statements of a company that follows GASB standards would be misleading due to unusual circumstances depart from those standards, the auditor should explain the circumstances in a separate paragraph and express an opinion that is…

Answer 9

Unmodified

Question 10

An independent accountant’s report is based on a review of interim financial information. If this report is presented in a registration statement, a prospectus should include a statements clarifying that the…

Answer 10

Accountant’s review report is not part of the registration statement
Within the meaning of the Securities Act of 1933