Question 1

One concern of the internal auditor is the efficiency with which the organization is run.

Accepted Answer

A) True 
 B)False  True

Question 2

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

Accepted Answer

A) Segregation of duties 
B) Safeguarding assets and records 
C) Independent verifications 
D) Proper authorizations 
A) Segregation of duties 
B) Safeguarding assets and records 
C) Independent verifications 
D) Proper authorizations C

Question 3

The bank informs a customer that a service charge has been assessed on their account by including a credit memorandum in the monthly bank statement.

Accepted Answer

A) True 
 B)False  False

Question 4

Sarbanes-Oxley requires that the audit committee be composed of

Accepted Answer

A) At least 50% of key officers who are on the board of directors 
B) A majority of all of the members of the board of directors 
C) The outside members of the board of directors and the external auditor 
D) Entirely outside members of the board of directors 
A) At least 50% of key officers who are on the board of directors 
B) A majority of all of the members of the board of directors 
C) The outside members of the board of directors and the external auditor 
D) Entirely outside members of the board of directors

Question 5

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.
Extensions and footings on purchase invoices are verified before the invoices are approved for payment

Accepted Answer

A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control 
A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control

Question 6

An accounting system must be computerized in order to ensure the company has proper internal control.

Accepted Answer

A) True 
 B)False

Question 7

Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure?

Accepted Answer

A) Segregation of duties 
B) Independent review and appraisal 
C) Independent verifications 
D) Proper authorizations 
A) Segregation of duties 
B) Independent review and appraisal 
C) Independent verifications 
D) Proper authorizations

Question 8

Segregation and rotation of duties is most effective in

Accepted Answer

A) increasing cost of goods sold. 
B) assisting management in overriding controls. 
C) preventing collusion. 
D) misappropriating company assets. 
A) increasing cost of goods sold. 
B) assisting management in overriding controls. 
C) preventing collusion. 
D) misappropriating company assets.

Question 9

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Accepted Answer

A) Add it to the bank balance 
B) Add it to the book balance 
C) Deduct from the bank balance 
D) Deduct from the book balance 
A) Add it to the bank balance 
B) Add it to the book balance 
C) Deduct from the bank balance 
D) Deduct from the book balance

Question 10

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Accepted Answer

A) The purchase requisition, purchase order, receiving report, and invoice are compared. 
B) The extensions and footings on the invoice are verified. 
C) An employee verifies that all of the approval activities have been completed before a check is prepared. 
D) The purchasing department prepares a voucher to request payment. 
A) The purchase requisition, purchase order, receiving report, and invoice are compared. 
B) The extensions and footings on the invoice are verified. 
C) An employee verifies that all of the approval activities have been completed before a check is prepared. 
D) The purchasing department prepares a voucher to request payment.

Question 11

The accountant for Darden Corp.was preparing a bank reconciliation as of April 30, 2014.The following items were identified:   In addition, Darden made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510.What amount will Darden report as its adjusted cash balance at April 30, 2014?

Accepted Answer

A) $44,650 
B) $45,890 
C) $46,110 
D) $46,250 
A) $44,650 
B) $45,890 
C) $46,110 
D) $46,250

Question 12

Which one of the following is a sound internal control procedure for cash disbursements?

Accepted Answer

A) Making copies of purchase orders for the receiving department so they know how many items to be expected upon delivery 
B) Using presigned checks to facilitate payment within the cash discount period 
C) Comparing purchase requisitions, purchase orders, receiving reports, and invoices 
D) Requiring the signature of the purchasing department supervisor on checks 
A) Making copies of purchase orders for the receiving department so they know how many items to be expected upon delivery 
B) Using presigned checks to facilitate payment within the cash discount period 
C) Comparing purchase requisitions, purchase orders, receiving reports, and invoices 
D) Requiring the signature of the purchasing department supervisor on checks

Question 13

Which of the following is not a requirement of Sarbanes-Oxley?

Accepted Answer

A) Annual report must include an internal control report 
B) External auditors can no longer provide human resource services 
C) External auditors can no longer provide brokerage services 
D) Must establish an internal control system that guarantees financial accuracy 
A) Annual report must include an internal control report 
B) External auditors can no longer provide human resource services 
C) External auditors can no longer provide brokerage services 
D) Must establish an internal control system that guarantees financial accuracy

Question 14

Deposits made by a company but not yet reflected in a bank statement are called

Accepted Answer

A) Debit memoranda 
B) Deposits in transit 
C) Credit memoranda 
D) None of the above 
A) Debit memoranda 
B) Deposits in transit 
C) Credit memoranda 
D) None of the above

Question 15

is a report required by section 404 of the Sarbanes-Oxley Act.

Accepted Answer

An interna

Question 16

What is the form sent by the seller to the buyer as evidence of a sale?

Accepted Answer

A) an invoice approval form 
B) a purchase order 
C) a receiving report 
D) an invoice 
A) an invoice approval form 
B) a purchase order 
C) a receiving report 
D) an invoice

Question 17

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.
Checks are signed by designated officers in the finance department.

Accepted Answer

A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control 
A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control

Question 18

Items that are included on a bank statement and decrease the bank account balance are called
_________________________.

Accepted Answer

The answer of Items that are included on a bank...

Question 19

Checks received from customers are considered to be cash in the company's books.

Accepted Answer

A) True 
 B)False

Question 20

An) is a form sent by the seller to the buyer as evidence of a sale.

Accepted Answer

The answer of An) is a form sent by the...

One concern of the internal auditor is the efficiency with which the organization is run.

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

The bank informs a customer that a service charge has been assessed on their account by including a credit memorandum in the monthly bank statement.

Sarbanes-Oxley requires that the audit committee be composed of

An accounting system must be computerized in order to ensure the company has proper internal control.

Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure?

Segregation and rotation of duties is most effective in

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Which one of the following is a sound internal control procedure for cash disbursements?

Which of the following is not a requirement of Sarbanes-Oxley?

Deposits made by a company but not yet reflected in a bank statement are called

is a report required by section 404 of the Sarbanes-Oxley Act.

What is the form sent by the seller to the buyer as evidence of a sale?

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. Checks are signed by designated officers in the finance department.

Items that are included on a bank statement and decrease the bank account balance are called _________________________.

Checks received from customers are considered to be cash in the company's books.

An) is a form sent by the seller to the buyer as evidence of a sale.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 6: Cash and Internal Control

One concern of the internal auditor is the efficiency with which the organization is run.

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

The bank informs a customer that a service charge has been assessed on their account by including a credit memorandum in the monthly bank statement.

Sarbanes-Oxley requires that the audit committee be composed of

An accounting system must be computerized in order to ensure the company has proper internal control.

Having only one person authorized to both prepare and sign checks is a violation of what internal control procedure?

Segregation and rotation of duties is most effective in

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Which one of the following is a sound internal control procedure for cash disbursements?

Which of the following is not a requirement of Sarbanes-Oxley?

Deposits made by a company but not yet reflected in a bank statement are called

is a report required by section 404 of the Sarbanes-Oxley Act.

What is the form sent by the seller to the buyer as evidence of a sale?

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. Checks are signed by designated officers in the finance department.

Items that are included on a bank statement and decrease the bank account balance are called _________________________.

Checks received from customers are considered to be cash in the company's books.

An) is a form sent by the seller to the buyer as evidence of a sale.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters