1. Consider the following statements: 1. Lapping involves covering a theft related to accounts receivable by using a later cash receipt to cover the previous theft. II. A "negative confirmation" requests that customers respond whether they agree or not with the amount due to the entity stated in the confirmation. a. I is true; Il is true b. I is true; Il is false c. I is false; Il is true d. I is false; Il is false 2. Tracing bills of lading to sales invoices provides evidence that a. Shipments to customers were properly authorized. b. Shipments to customers were ordered. c. Billed sales were shipped. d. Shipments to customers were billed. 3. Which of the following terms involves "arrangements that are used to alter the terms and conditions of the recorded sales" (see textbook page 338)? a. Early revenue recognition b. Fictitious sales. c. (Hidden) Side agreements. d. Related-party agreements. 4. In auditing accounts receivable, the "negative form of confirmation request most likely would be used when a. Accounts receivable consist of a number of accounts with large customer balances b. Control Risk and Inherent Risk are assessed to be low; procedures are performed to test this assessment. c. Recipients are likely to return positive confirmation requests without verifying the accuracy of the information. d. The auditor performs a dual-purpose test that assesses control risk and obtains substantive evidence. 5. As part of the revenue process, what is used to BILL the customer? a. Credit Approval Form. b. Shipping Document. c. Sales Invoice. d. Sales Journal