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Assurance Services and The Integrity of Financial Reporting, 8 Edition William C. Boynton Raymond N. Johnson
Assurance Services and The Integrity of Financial Reporting, 8 Edition William C. Boynton Raymond N. Johnson
William C. Boynton
California Polytechnic State
University at San Luis Obispo
Raymond N. Johnson
Portland State University
• Risk Assessment
• Monitoring
C. Inventory Purchase
Study Break
2. This internal control component should
provide management with feedback as
to whether internal controls pertaining
to revenue cycle transactions and
balances are operating as intended.
A. Monitoring
B. Initial Assessments of Control Risk
C. Information and Communication
D. Control Environment
A. Monitoring
Control Activities for Credit
Sales Transactions
• Credit Sales Orders
– Over-the-Counter
– Mail Order
– Internet
• Sales Order
• Shipping Document
– Bill of Lading
– Packing Slip
• Sales Invoice
• Sales Journal
• Authorizing Sales
– Accepting Customer Orders
– Approving Credit
• Recording Sales
System Flowchart – Credit Sales
System Flowchart – Credit Sales
System Flowchart – Credit Sales
Study Break
3. This document is a journal listing
of the completed sales
transactions.
A. Sales invoice
B. Sales transactions files
C. Authorized price list
D. Sales journal
D. Sales journal
Study Break
4. This document shows the
description, quantity, and other
data pertaining to a customer
order.
A. Customer order
B. Sales order
C. Shipping document
D. Sales invoice
B. Sales order
Cash Receipts Transactions –
Common Documents and Records
• Remittance Advice
• Prelist
• Receiving report
• Credit memo
• Journal entry
• Other Controls
• Tests of Controls
Study Break
5. This cash receipts transaction
document is a listing of cash
receipts received through the
mail.
A. Remittance advice
B. Prelist
C. Daily cash summary
D. Validated deposit slip
B. Prelist
Study Break
6. All of the following are sales
adjustment functions, except:
A. Granting cash discounts
B. Determining uncollectible accounts
C. Recording the cash receipts
D. Granting sales returns and allowances
– Completeness
• Analytical Procedures
Designing Substantive Tests
• Tests of Details of Transactions
– Vouch Revenue Transactions
– Forms of Confirmation
• Positive Confirmation
• Negative Confirmation
– Applicability to Assertions
Designing Substantive Tests
• Tests of Details of Accounting
Estimates
– Allowance for Doubtful Accounts
– Aged Trial Balance
B. Negative Confirmation
Study Break
8. This cutoff test is designed to obtain
reasonable assurance that cash receipts
are recorded in the accounting period
in which received.
A. Sales cutoff test
B. Sales return cutoff test
C. Vouching revenue transactions
D. Cash receipts cutoff test