An Internal Control Questionnaire Indicates That an Approved Receiving Report

question 27

Multiple Choice

An internal control questionnaire indicates that an approved receiving report is required to accompany every check request for payment of merchandise.Which of the following procedures provides the greatest assurance that this control is operating effectively?

• A)Select and examine receiving reports and ascertain that the related canceled checks are dated no earlier than the receiving reports.
• B)Select and examine receiving reports and ascertain that the related canceled checks are dated no later than the receiving reports.
• C)Select and examine canceled checks and ascertain that the related receiving reports are dated no earlier than the checks.
• D)Select and examine canceled checks and ascertain that the related receiving reports are dated no later than the checks.

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Definitions:

Accounting Principle

Fundamental guidelines or rules that govern the accounting process, ensuring that financial statements are accurate, reliable, and consistent.

Accounting Estimate

An approximation of a financial statement element, item, or account in the absence of exact data.

Prospective Approach

A method of accounting that applies new standards or changes in accounting policy to transactions occurring after the date of the change or standard implementation.

Debit

An entry on the left side of an account, representing an increase in assets or expenses, or a decrease in liabilities, equity, or revenue.