ACC555 Final Exam

Name: ACC555 Final Exam
Brand: Strayer University
Price: 2 USD
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Author: Sofia Rivera

Final exam covering advanced accounting principles.

Sofia Rivera

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ACC555 Final Exam
1. The 10,000 accounts receivable of DEF Company have a total book value of $120,000.
A CPA has selected and audited a sample of 100 accounts with a total book value of $1,000 and
an audited value of $1,200.
Using the ratio estimation technique, the estimated total audited value of the population is:
A. $100,000.
B. $120,000.
C. $140,000.
D. $144,000
2 The 10,000 accounts receivable of DEF Company have a total book value of $120,000.
A CPA has selected and audited a sample of 100 accounts with a total book value of $1,000 and
an audited value of $1,200.
Using the mean-per-unit estimation technique, the estimated total audited value of the population
is:
A. $100,000.
B. $120,000.
C. $140,000.
D. $144,000.
3 Using the mean-per-unit estimation method an auditor has properly calculated the
estimated total audited value of a population as $200,000. Her sample included 200 of the
population's 40,000 items. She found that, in her sample the average audited value was $1 less
than the average book value. What was the average audited value in the sample?
A. $4.
B. $5.
C. $6.
D. $10.
4 Using difference estimation, an auditor has taken a sample of 200 from a population's
40,000 items; that population has a book value of $200,000. She found that in her sample the
average audited value was $4.20, while the average book value was $5.20. What is the estimated
total audited value of the population?
A. $160,000.
B. $161,538.
C. $168,000.
D. $200,000.
5. Using ratio estimation, an auditor has taken a sample of 200 from a population's 40,000
items; that population has a book value of $200,000. She found that in her sample the average
audited value was $4.20, while the average book value was $5.20. What is the estimated total
audited value of the population?

A. $160,000.
B. $161,538.
C. $168,000.
D. $200,000.
6. Using mean-per-unit estimation, an auditor has taken a sample of 200 from a
population's 40,000 items; that population has a book value of $200,000. She found that in her
sample the average audited value was $4.20, while the average book value was $5.20. What is
the estimated total audited value of the population?
A. $160,000.
B. $161,538.
C. $168,000.
D. $200,000.
7. If the projected misstatement in a nonstatistical sampling is $8,000, while the tolerable
misstatement is $9,000, what would an auditor likely conclude?
A. Since the projected misstatement is less than the tolerable misstatement, the account is
not misstated.
B. Since the projected misstatement is less than the tolerable misstatement, the account is
misstated.
C. The risk is high that the account is materially misstated.
D. The analysis has been improperly performed since the projected misstatement is
unequal to the tolerable misstatement.
8. A dual purpose test simultaneously.
A. Addresses two different accounts.
B. Functions as a substantive test and as a test of controls.
C. Functions as an analytical procedure and a substantive test.
D. Substantiates an ending balance and the transactions making up the balance.
9. The 1000 accounts receivable of Winco Company have a total book value of $20,000
(Average book value = $20). Bob Duffo, CPA, has selected and audited a sample of 50 accounts
with the following mean values:
1. Book value of $19.
2. Audited value of $19.60.
What is the estimated total audited value using mean per unit sampling?
A. $19,000.
B. $19,600.
C. $20,000.
D. $20,632.
10. The 1000 accounts receivable of Winco Company have a total book value of $20,000
(Average book value = $20). Bob Duffo, CPA, has selected and audited a sample of 50 accounts
with the following mean values:
1. Book value of $19.

2. Audited value of $19.60.
What is the estimated total audited value using difference estimation sampling?
A. $19,387.
B. $19,400.
C. $19,600.
D. $20,600.
11. Which of the following is correct concerning "window dressing" for cash?
A. A segregation of duties within the cash function effectively eliminates its occurrence.
B. It generally involves manipulation of inventory.
C. It is illegal, and an audit is designed to provide reasonable assurance of its detection.
D. Many forms of it require no action by the auditors.
12. Which of the following statements is not correct?
A. Cash is important to the audit process because of its vulnerability to misappropriation,
despite the fact that the balance at the balance sheet date may be immaterial.
B. Payroll cash account balances kept on an imprest basis are more easily controlled than
others not so kept.
C. Confirmation of cash should only be performed as of the balance statement date
because the auditor expresses an opinion as of that date.
D. Reviewing interbank transfers is important to the auditor because of the possibility that
the client may be engaged in kiting.
13. The auditors use a bank cutoff statement to compare:
A. Deposits in transit on the year-end cash general ledger account to deposits in the cash
receipts journal.
B. Checks dated prior to year-end to the outstanding checks listed on the year-end bank
reconciliation.
C. Deposits listed on the cutoff statement to disbursements in the cash disbursements
journal.
D. Checks dated subsequent to year-end to the outstanding checks listed on the year-end
bank statement.
14. A practical and effective audit procedure for the detection of lapping is:
A. Preparing an interbank transfer schedule.
B. Comparing recorded cash receipts in detail against items making up the bank deposit as
shown on duplicate deposit slips validated by the bank.
C. Tracing recorded cash receipts to postings in customers' ledger cards.
D. Preparing a proof of cash.
15. Which of the following is not a control that generally is established over cash
transactions?
A. Separating cash handling from recordkeeping.
B. Centralizing the receipt of cash.
C. Depositing each day's receipts intact.

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Strayer University

Subject

Accounting

ACC555 Final Exam

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