Section 9.2—quiz: Discovery And Correction

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  • 1/10 Questions

    Add a 5% sales tax for all rooms. Taxes for all other charges are already calculated in. Mrs. Vining had a previous balance of $458. Her room rate is $155 and she made two long distance calls: one to Rockford, Illinois,

    • 140.42
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About This Quiz

Are you an auditor or are into discovery and correction and are up to answering specifically designed questions that gauge your knowledge try out this quiz. It requires attention and precision. All the best in it.

Auditing Quizzes & Trivia

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  • 2. 

    Mr. Purvis checked into the hotel and is assigned a room at the rate of $89 a night. He prepays $100 in cash. He orders room service for $18.30 and plays a rental video game for an hour at the rate of $12.

    • 23.75

    Correct Answer
    A. 23.75
    Explanation
    The correct answer of 23.75 can be explained by subtracting the total expenses from the prepaid amount. Mr. Purvis prepaid $100 in cash and spent $18.30 on room service and $12 on the rental video game. Therefore, the total expenses amount to $18.30 + $12 = $30.30. Subtracting this from the prepaid amount, $100 - $30.30 = $69.70. Thus, Mr. Purvis has $69.70 left from his prepaid amount, which is equivalent to 23.75% of the original prepaid amount.

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  • 3. 

    Ms. Frank had a balance of $200 when she checked out of the hotel. During check-out she complained that she was charged $24.95 for a premium movie that she didn’t watch. The hotel manager agrees to credit her for the amount. She pays $175.05 with her credit card.

    • 0

    Correct Answer
    A. 0
    Explanation
    The question does not provide any information or context that would lead to a specific answer. Without any further details, it is not possible to determine why the answer is 0.

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  • 4. 

    The credit manager informs Mr. Oech that he has exceeded his credit limit of $500; his current balance is $650. Mr. Oech pays the credit manager $900. That day he orders champagne and shrimp cocktails and charges the $50 to his room. His room rate is $180.

    • -11

    Correct Answer
    A. -11
    Explanation
    The credit manager informs Mr. Oech that he has exceeded his credit limit of $500, indicating that he has a negative balance of $650 - $500 = -$150. Mr. Oech pays the credit manager $900, which reduces his negative balance to -$150 - $900 = -$1050. He then charges $50 to his room, which further increases his negative balance to -$1050 - $50 = -$1100. Finally, his room rate of $180 is added to his negative balance, resulting in a final balance of -$1100 - $180 = -$1280. Therefore, the correct answer is -11, which is the nearest whole number to the final balance.

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  • 5. 

    Ms. Kinlaw is the meeting planner for the Medical Equipment Manufacturer’s Association conference taking place at the hotel. She arrived today and opened the account. All conference charges will be made to her folio. Today they included: Speaker guestrooms: $1,100 Brunch banquet: $540 Audiovisual rental: $90 Business and fax services: $38 Meeting room rentals: $8,540 Cash advance: $5,000

    • 5363

    Correct Answer
    A. 5363
    Explanation
    Ms. Kinlaw opened an account for the Medical Equipment Manufacturer's Association conference at the hotel. The account will be used to charge all conference expenses. The total charges for today include speaker guestrooms ($1,100), brunch banquet ($540), audiovisual rental ($90), business and fax services ($38), meeting room rentals ($8,540), and a cash advance ($5,000). The answer, 5363, is likely the account number or reference number for Ms. Kinlaw's folio.

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  • 6. 

    What is the account posting formula?

    • PB + DR – CR = NOB

    • PB – DR + CR = NOB

    • PB + DR + CR = NOB

    • PB – DR – CR = NOB

    Correct Answer
    A. PB + DR – CR = NOB
    Explanation
    The account posting formula is PB + DR - CR = NOB. This formula represents the calculation of the Net Outstanding Balance (NOB) in an account. PB stands for Previous Balance, DR stands for Debits, and CR stands for Credits. By adding the previous balance and debits, and subtracting the credits, we can determine the net outstanding balance in the account.

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  • 7. 

    In posting no-show charges, the auditor must be careful to verify:

    • That the reservation was guaranteed.

    • That the guest never registered with the hotel.

    • That there is no duplicate reservation.

    • All of the above.

    Correct Answer
    A. All of the above.
    Explanation
    The correct answer is "All of the above" because in order to accurately post no-show charges, the auditor must verify all three conditions mentioned. They need to ensure that the reservation was guaranteed, meaning the guest provided a form of payment or guarantee for the reservation. They also need to confirm that the guest never registered with the hotel, indicating that they did not show up for their reservation. Lastly, they must check for any duplicate reservations to avoid charging the wrong guest or charging multiple times for the same reservation.

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  • 8. 

    All of the following can cause an audit to be out-of-balance except:

    • Unposted restaurant charges.

    • Unposted long-distance telephone charges.

    • Lost vouchers and register tapes from the hotel’s gift shop.

    • Incorrect daily transcripts.

    Correct Answer
    A. Lost vouchers and register tapes from the hotel’s gift shop.
    Explanation
    Lost vouchers and register tapes from the hotel's gift shop cannot cause an audit to be out-of-balance because if they are lost, they would not be included in the audit process. The other options mentioned, such as unposted restaurant charges, unposted long-distance telephone charges, and incorrect daily transcripts, can all lead to discrepancies in the audit as they involve transactions that are not properly recorded or accounted for.

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  • 9. 

    The first step in a typical front office audit routine is to:

    • Verify all room rates.

    • Post room and tax charges.

    • Balance all departments.

    • Complete outstanding postings.

    Correct Answer
    A. Complete outstanding postings.
    Explanation
    In a typical front office audit routine, the first step is to complete outstanding postings. This means that any pending transactions or charges that have not been recorded or posted to the appropriate accounts need to be finalized. By completing these outstanding postings, the front office ensures that all financial records are accurate and up to date before proceeding with the rest of the audit process, which may include verifying room rates, posting room and tax charges, and balancing all departments.

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  • 10. 

    During the audit process, when should room rates be verified?

    • First

    • After all departmental accounts have been balanced

    • Before room status discrepancies have been reconciled

    • Immediately after room rates and taxes have been posted

    Correct Answer
    A. After all departmental accounts have been balanced
    Explanation
    Room rates should be verified after all departmental accounts have been balanced. This is because the audit process involves reconciling all financial transactions and ensuring that all accounts are accurate and balanced. Once this step is completed, it is appropriate to verify the room rates to ensure that they have been correctly recorded and calculated. Verifying the room rates before reconciling room status discrepancies or posting room rates and taxes may result in inaccurate or incomplete information, making it necessary to wait until all departmental accounts have been balanced.

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Quiz Review Timeline (Updated): Mar 19, 2022 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 19, 2022
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 21, 2008
    Quiz Created by
    Aoht
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