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detection risk.
inherent risk.
tolerable misstatement.
expected misstatement in the account balance.
55. Which of the following is the best example of the control objective
in the revenue cycle that all transactions are recorded accurately?
(Points: 4)
Sales are recorded at the invoice price expected to be collected
from customers.
Sales orders have sequential numbering.
Recorded sales transactions are evidenced by valid invoices and
shipping documents.
Credits to customer accounts are classified as liabilities.
56. In an audit of financial statements, the risk of the high rate of
return of products sold includes that of (Points: 4)
sales that are recorded improperly.
an estimate of accrued returns that reduces net income.
a reduction of net sales for an increase to the sales returns and
allowance account.
consignment goods that are returned and forwarded to third
parties.
57. Confirmations that are sent to select customers asking them to
review the current balance due the client as shown on the client's
statement and return the letters directly to the auditor indicating