Below Are Five Audit Procedures, All of Which Are Tests

question 73

Short Answer

Below are five audit procedures, all of which are tests of transactions associated with the audit of the sales and collection cycle.Also below are the six general transaction-related audit objectives and the five management assertions.For each audit procedure, indicate (1)its audit objective, and (2)the management assertion being tested.

1.Vouch recorded sales from the sales journal to the file of bills of lading.
(1)________.
(2)________.
2.Compare dates on the bill of lading, sales invoices, and sales journal to test for delays in recording sales transactions.
(1)________.
(2)________.
3.Account for the sequence of prenumbered bills of lading and sales invoices.
(1)________.
(2)________.
4.Trace from a sample of prelistings of cash receipts to the cash receipts journal, testing for names, amounts, and dates.
(1)________.
(2)________.
5.Examine customer order forms for credit approval by the credit manager.
(1)________.
(2)________.

Calculate product costs using both traditional costing and activity-based costing systems.

Understand the impact of costing systems on product pricing decisions.

Understand the concept of activity-based costing and how it differs from traditional costing systems.

Calculate predetermined overhead rates based on different bases (machine-hours, direct labor-hours, capacity).

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Definitions:

Attachment

An emotional bond that forms between individuals, particularly in the context of a child's early relationships with caregivers.

Infants

Very young children, typically under one year of age, at the earliest stages of development.

Moro Reflex

is an infantile reflex characterized by the baby spreading its arms and then unspreading them in response to a sensation of falling.

Startle Reflex

An automatic reaction to sudden, unexpected stimuli, such as a loud noise or sharp movement, demonstrating the body's fight or flight response.