Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

Financial Accounting

6. Internal Controls and Reporting Cash

Fraud and the Fraud Triangle

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Multiple Choice

Tracing shipping documents to prenumbered sales invoices provides evidence that:

all shipments made have been properly recorded as sales

all sales invoices have been prenumbered sequentially

all recorded sales have been shipped to customers

all shipping documents have been approved by management

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Verified step by step guidance

Understand the purpose of tracing shipping documents to prenumbered sales invoices. This process is part of an audit procedure to ensure the accuracy and completeness of sales records.

Recognize that shipping documents represent evidence of goods being shipped to customers, while sales invoices represent the recording of those shipments as sales in the accounting system.

Consider the relationship between shipping documents and sales invoices. Tracing shipping documents to sales invoices ensures that every shipment made has been properly recorded as a sale, addressing completeness of sales records.

Evaluate the other options provided in the problem. For example, while prenumbering sales invoices sequentially is a control measure, it does not directly relate to tracing shipping documents. Similarly, ensuring all recorded sales have been shipped or that shipping documents are approved by management are different audit objectives.

Conclude that the correct answer is: 'all shipments made have been properly recorded as sales,' as this is the primary evidence provided by tracing shipping documents to prenumbered sales invoices.