$19.$ An internal control questionnaire indicates that an approved receiving report accompanies every check request. To test this control, an auditor could select and examine:

a$.$ Receiving reports and determine that the related canceled checks are dated no earlier than the receiving reports.

b$.$ Receiving reports and determine that the related canceled checks are dated no later than the receiving reports.

c$.$ Canceled checks and determine that the related receiving reports are dated no earlier than the checks.

d$.$ Canceled checks and determine that the related receiving reports are dated no later than the checks.

$20.$ Which of the following would prevent a paid disbursement from being paid a second time?

a$.$ Individuals responsible for signing checks should prepare vouchers.

b$.$ Disbursements should be approved by at least two responsible officials.

c$.$ The disbursement date should be within a few days of the date the voucher is presented for payment.

d$.$ The official signing the check should cancel the supporting documents.

Chapter $13$ Accounts Payable, Prepaids, and Accrued Liabilities

$1.$ Which of the following procedures is most telling in addressing the existence assertion for accounts payable?

a$.$ Test for unrecorded liabilities.

b$.$ Confirm balances with creditors.

c$.$ Verify the accounts payable trial balance.

d$.$ Perform analytical procedures.

$2.$ Assume an auditor's interim consideration of internal control in the expenditure$/$disbursement cycle reveals that control risk can be assessed below the maximum and detection risk above the minimum for some assertions. Which of the following is true about substantive tests applied to accounts payable?

a$.$ The auditor is more apt to confirm payables balances.

b$.$ The auditor is less apt to perform substantive tests at the balance sheet date only.

c$.$ The auditor is more apt to increase the extent of substantive tests.

d$.$ The auditor is more apt to ignore the risk of incorrect acceptance when sampling accounts payable.

$3.$To help hold detection risk to a minimum for assertions related to payables, an auditor might:

a$.$ Confirm payables at an interim date.

b$.$ Search for unrecorded payables.

c$.$ Perform analytical procedures on nonfinancial measures.

d$.$ Make inquiries of management.

$4.$ Of the following, which is an accounts payable confirmation most likely to include? An itemized statement of:

a$.$ Invoices.

b$.$ Purchase orders.

c$.$ Shipping documents.

d$.$ Notes, acceptances, and other obligations.

$5.$ Which of the following procedures would help an auditor test for overstatements of accounts payable at the balance sheet date?

a$.$ Trace entries in the cash disbursements records to items in the accounts payable trial balance.

b$.$ Agree items in the file of unmatched receiving reports to the accounts payable trial balance.

c$.$ Trace items in the accounts payable trial balance to documentation contained in canceled voucher packages.

d$.$ Coordinate cutoff tests performed for receiving and for shipping.

$6.$ The purpose of purchase cutoff tests is to determine whether:

a$.$ All purchases are recorded.

b$.$ Vendor invoices have been paid on time.

c$.$ The client has title to the goods purchased.

d$.$ Payables are recorded in the appropriate period.

$7.$ In testing cutoff for purchases and payables on December $31,$ an auditor is confronted with the following four scenarios. Which of the four most likely represents a cutoff error, requiring that the auditor propose an adjusting journal entry?

a$.$ Shipping terms are FOB shipping point. Goods were shipped on December $31.$

b$.$ The purchase was recorded on December $31.$ Shipping terms are FOB destination. Goods were shipped on December $31.$ The purchase was recorded on December $31.$

c$.$ Shipping terms are FOB shipping point. Goods were shipped on January $2.$ The purchase was recorded on January $4.$

d$.$ Shipping terms are FOB destination. Goods were shipped on December $31.$ The purchase was recorded on January $2.$