Acc 492 Week 2 Individual Multiple Choice

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Post your answers to the Multiple Choice Questions in the Assignments folder.

Please post your answers to the Multiple Choice questions to the Assignments section.
1. Which of the following accounts does not appear in the acquisition and expenditure cycle?
a. Cash.
b. Purchases Returns.
c. Sales Returns.
d. Prepaid Insurance.

2. For which of the following accounts would the matching concept be the most
appropriate?
a. Cost of Goods Sold.
b. Research and Development.
c. Depreciation Expense.
d. Sales.

3. Which of the following would not overstate current period net income?
a. Capitalizing an expenditure that should be expensed.
b. Failing to record a liability for an expenditure.
c. Failing to record a check paying an item in Vouchers Payable.
d. All of the above would overstate net income.

4. A client’s purchasing system ends with the recording of a liability and its eventual payment. Which of the following best describes the auditor’s primary concern with respect to liabilities resulting from the purchasing system?
a. Accounts payable are not materially understated.
b. Authority to incur liabilities is restricted to one designated person.
c. Acquisition of materials is not made from one vendor or one group of vendors.
d. Commitments for all purchases are made only after established competitive bidding
procedures are followed.

5. Which of the following is an internal control activity that could prevent a paid disbursement voucher from being presented for payment a second time?
a. Vouchers should be prepared by individuals who are responsible for signing disbursement
checks.
b. Disbursement vouchers should be approved by at least two responsible management
officials.
c. The date on a disbursement voucher should be within a few days of the date the...