Your Results:

The correct answer for each question is indicated by a .

1 INCORRECT

To be recognized, revenues must be A) B) C) Realized Realizable Earned

All the above D) Feedback: Incorrect. To be recognized revenues must be earned and realized or realizable

2 INCORRECT

Recording a sale while keeping the goods in your own warehouse is called: A) B) C) Invoice and keep. Bill and hold. Recognition.

None of the above. D) Feedback: Incorrect. Bill and Hold is correct

3 INCORRECT

Which of the accounts would not be included in the Revenue and Collection cycle? A) B) C) Cash in bank. Accounts Receivable. Raw Materials.

Bad Debt Expense. D) Feedback: Incorrect. Accounts Receivable is included in the cycle

4 INCORRECT

Custody is transferred from the warehouse to the shipping department upon authorization of the A) B) C) Shipping order. Customer order. Purchase order.

Invoice. D) Feedback: Incorrect. This initiates the process, but may not indicate

approval.

5 INCORRECT

A form signed by the carrier to verify goods are shipped is called the A) B) C) Shipping order. Receiving report. Carrier form.

Bill of lading. D) Feedback: Incorrect. This is prepared by the recipients after goods are shipped and received.

6 CORRECT

A fraud technique whereby someone steals a cash receipt and uses a later cash receipt from another customer to cover the theft of the first receipt is called A) B) C) Kiting Lapping Bill and hold

None of the above D) Feedback: Correct. This refers to lapping.

7 INCORRECT

Approval of credit sales by the credit department supports the assertion of A) B) C) Existence or occurrence. Completeness. Valuation or allocation.

Rights and obligations. D) Feedback: Incorrect. This helps ensure the receivable will be collectible.

8 INCORRECT

Confirming accounts receivable primarily supports the assertion of A) B) C) Existence. Completeness. Valuation or allocation.

Rights and obligations. D) Feedback: Incorrect. If a customer owes a debt that is not recorded, it

may not reveal the shortage to the seller.

9 INCORRECT

The most reliable evidence comes from A) B) C) A positive confirmation. A negative confirmation. A blank confirmation.

Examining a sales invoice. D) Feedback: Incorrect. A blank confirmation is the most reliable because the customer has to look up the amount to fill in the blank.

10 INCORRECT

Which of the following responses to a confirmation request at December 31 is most likely to indicate a misstatement? A) B) C) This amount was paid on December 30th. We are unable to confirm this account. We returned these items in November.

We received these goods on January 4th. D) Feedback: Incorrect. The client probably doesn't keep records in such a manner as to know the outstanding b