The Professional CPA Review Scliool ‘Main: 3FC. Vitaroman Blip. 873 P. Campa St. cor Espana, Sampaloc, Mania ‘@ (02) 735 890% / 735 9033 / 0922 861 0191 ‘eal! ai: cxc_ace@yahoo com ge ~~ 2a “SAL EU iE 20. Cash receipts from sales on account have been. misappropriated. Which of the following-aets would conceal this defaication and be least likely to be detected by an auditor? ‘A. Overstating the accounts receivable subsidiary ledger 8. Overstating the accounts receivable contral account| C._Understating the sales journal D. _Understating the cash receipts journal 21. ACPA\s engaged in the annual audit of a client for the year ended December 31, 2003. The client took a complete physical inventory under the CPA's observation on December 18 and adjusted ifs inventory control account and detailed perpetual inventory records to agree with the physical inventory. The-client considers a sale to be made in the period that goods are shipped. Listed below are four items taken from the CPA's sales-cutoff-test worksheet. Which item does not require adjusting entry on the client's books? hi ‘Shipped Recorded As Sale Jnvente A 120 1219 122 8. 124 126 1218 c 12/31 412 12131 ©. 12 12131 12881 22. The auditor finds a solution in, which one person has the ability to collect receivable, make deposits, ‘Issue credit memos, and record receipts of payments, from cash receipts. Which of the following, audit procedures would be most effective in discovering fraud in this scenario? ‘A. Send positive confirmations to a random selection of customers. B. Send negative confirmations to all outstanding accounts receivable customers, C. Perform a detailed review of debits to customer discounts, sales returns, or other debit ‘accounts, excluding cash posted to the cash receipts journal. D. Take a sample of bank deposits and trace the detail in each bank deposit back to the entry in the cash receipts journal 23, An auditor suspects that a client's cashier is misappropriatig cash receipts for personal use by lapping customer checks received in the mail. In attempting to uncover this embezzlement scheme, the auditor most likely would compare the A. Dates checks are deposited per bank statements. with the dates remittance credits are recorded, Daily cash summaries with the sumé of the cash receipts journal entries, Individual bank deposit sips with the details of the monthly bank statements, Dates uncollectibie accounts are authorized to be written off with the dates the write-offs are ‘actually recorded. vonCRC AGEYAUDITING: (Final Pre-board Exams Maj 2018 Batch) Page 33. Whenever you use data from a report, make sure you <(a) site (b) cite > your sources, 34. The new Chairman issued a demand for conformity <(a) to (bjwith> the amended R.A. 9298, 35. Of all their < (a) eriteria (b) eriterion> for evaluating job performance, customer satisfaction was, the most important, 36. The independent, reviewing partner cifers < (a) from (b) with > you on this matter; you must explain in writing about the need to use the alternative method of valuation. 37, The business rationale, as understood by the auditor, does not < (a) jibe (b) jive (e) gibe>with evidences gathered about the client-reported revenues. 38. Choose the sentence that uses complement or compliment correctly, ‘A. Alter the fast hiring phase, we finaly had a full compliment of customer service reps ready to answer calls, 8. Italways seemed like Mr. Larken complemented the boys in the class fof their hard work more than the girs C. Jake beamed when his peers complimented him on his performance in the schoo! lalent show. D. The complements she received did not make Chelsea feel better about her defeat in the golf tournament. 39. Read this topic sentence: “A trial for two former executives of Mason's sales department begins Monday.” Based on this topic sentence, what can be predicted about the contents of the text? ‘A. Itwillbe about an upcoming court case. B._twill be about two executives’ ideas for improving sales. C._ Itwill be about back-to-school sales at Mason's 1D ttwall be about the infrastructure of Mason's sales depiartment 40. During the panning phase of the audit engagement, the in-charge was writing the following account 2s part of his business rationale. He wishes to identiy ertical areas of risk in order to plan well. He ‘wishes to determine whether a tight set of evidence:is present and would not be in conflict with how he understands the economy participated in by his client. His chant happens to be in the ‘manufacture of food items exported to European countries such as Spain, France and italy. “Asheville, North Carolina, is the largest city in Western North Carolina (NC) where it cantinues to {grow and prosper. The Ashevile-Metropolitan area estimates just aver 400,000 people lve within a Tow-county area near the cily of Ashevile. Locals practice a comfortable, laid-back approach to fife thal involves many festivals and outdoor activities throughout the year. The city presents a calm, gentle qualiy. Life passes siowly in Asheville, where people spend time visiting in the focal establishments or shopping in farmers’ markets. The architecture reflects the city's rich history and culture, nestled in the foothills and forests of Appalachia. At nighl, restaurants and venues come alive with bluegrass and folk music performances. While most areas of the South have suffered in the economic problems of this last decade, Ashevilé continues to grow. American industries have ‘moved industrial work overseas. Prosperous towns and cities operate commercial economies instead of relying heavily on industrial economies as they had in the past. Asheville isin the process of transitioning away trom blue-collar trades into more white-collar, commercial businesses. The cily teems with entrepreneurship. Stinreets are lined with local shops and eateries. Many corporations have recently relocated offices to downtown Asheville. If this trend continues, then the city wil ‘continue to grow in the years to come." ‘What would ihe in-charge most likely predict to happen if Asheville fails to make a successful transition to a commercial economy? (adapted) A. Workers will go on strike, and riots wil erupt in the streets. 8 The city wil have to transition back to blue-collar trades. C._ North Carolina will be forced to secede from the European Union. 1D. The economy will stagnate, and the city's growth will be slow: