Question 1

A deposit made by a company will appear on the bank statement as a(n)

Accepted Answer

A) decrease. 
B) increase. 
C) debit memorandum. 
D) credit memorandum. 
A) decrease. 
B) increase. 
C) debit memorandum. 
D) credit memorandum.

Question 2

From an internal control standpoint the asset most susceptible to improper diversion and use is

Accepted Answer

A) prepaid insurance. 
B) cash. 
C) buildings. 
D) land. 
A) prepaid insurance. 
B) cash. 
C) buildings. 
D) land.

Question 3

Which of the following would be added to the balance per books on a bank reconciliation?

Accepted Answer

A) Outstanding checks. 
B) Deposits in transit. 
C) Notes collected by the bank. 
D) NSF check. 
A) Outstanding checks. 
B) Deposits in transit. 
C) Notes collected by the bank. 
D) NSF check.

Question 4

Blank checks

Accepted Answer

A) should be safeguarded. 
B) should be pre-signed. 
C) do not need to be safeguarded since they must be signed to be valid. 
D) should not be pre-numbered. 
A) should be safeguarded. 
B) should be pre-signed. 
C) do not need to be safeguarded since they must be signed to be valid. 
D) should not be pre-numbered.

Question 5

The most important element of the fraud triangle is rationalization.

Accepted Answer

A) True 
 B)False

Question 6

Expected direct materials purchases for Rees Company are $210000 in the first quarter and $270000 in the second quarter.Forty percent of the purchases are paid in cash as incurred and the balance is paid in the following quarter.The budgeted cash payments for purchases in the second quarter are:

Accepted Answer

A) $288000. 
B) $270000. 
C) $234000. 
D) $216000. 
A) $288000. 
B) $270000. 
C) $234000. 
D) $216000.

Question 7

Which of the following is an appropriate internal control activity for cash?

Accepted Answer

A) Record keeping and custodianship over cash should be performed by the same person. 
B) Banking facilities should be used as little as possible. 
C) All payments should be made with currency not checks. 
D) The amount of cash on hand should be kept to a minimum. 
A) Record keeping and custodianship over cash should be performed by the same person. 
B) Banking facilities should be used as little as possible. 
C) All payments should be made with currency not checks. 
D) The amount of cash on hand should be kept to a minimum.

Question 8

Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse.An assessment of this situation indicates

Accepted Answer

A) documentation procedures are violated. 
B) independent internal verification is violated. 
C) segregation of duties is violated. 
D) establishment of responsibility is violated. 
A) documentation procedures are violated. 
B) independent internal verification is violated. 
C) segregation of duties is violated. 
D) establishment of responsibility is violated.

Question 9

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682 the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A) add $54 to the book's balance. 
B) subtract $54 from the book's balance. 
C) deduct $54 from the bank's balance. 
D) deduct $628 from the book's balance. 
A) add $54 to the book's balance. 
B) subtract $54 from the book's balance. 
C) deduct $54 from the bank's balance. 
D) deduct $628 from the book's balance.

Question 10

Bishop Company wrote checks totaling $51240 during October (its first month of operations) and $55950 during November.$48720 of these checks cleared the bank in October and $54660 cleared the bank in November.What was the amount of outstanding checks on November 30?

Accepted Answer

A) $3810. 
B) $690. 
C) $1830. 
D) $5940. 
A) $3810. 
B) $690. 
C) $1830. 
D) $5940.

Question 11

An example of segregation of duties is having a check signer recording cash disbursements.

Accepted Answer

A) True 
 B)False

Question 12

Internal control measures

Accepted Answer

A) only apply to publicly traded companies. 
B) are in place to safeguard assets. 
C) can eliminate all irregularities in the accounting process. 
D) All of these answer choices are correct. 
A) only apply to publicly traded companies. 
B) are in place to safeguard assets. 
C) can eliminate all irregularities in the accounting process. 
D) All of these answer choices are correct.

Question 13

Each of the following is a feature of internal control except

Accepted Answer

A) limited access to assets. 
B) independent internal verifications. 
C) authorization of transactions. 
D) generic design of documents. 
A) limited access to assets. 
B) independent internal verifications. 
C) authorization of transactions. 
D) generic design of documents.

Question 14

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Accepted Answer

A) establishment of responsibility is violated. 
B) independent internal verification is violated. 
C) documentation procedures is violated. 
D) separation of duties is violated. 
A) establishment of responsibility is violated. 
B) independent internal verification is violated. 
C) documentation procedures is violated. 
D) separation of duties is violated.

Question 15

Supervisors counting cash receipts daily is an example of

Accepted Answer

A) human resource controls. 
B) independent internal verification. 
C) establishment of responsibility. 
D) segregation of duties. 
A) human resource controls. 
B) independent internal verification. 
C) establishment of responsibility. 
D) segregation of duties.

Question 16

Which item is a current asset?

Accepted Answer

A) Cash - regardless of whether it has a positive or negative balance. 
B) Cash equivalents. 
C) Cash that will be used to close a plant in eighteen months. 
D) Restricted cash that will not be used within the upcoming year. 
A) Cash - regardless of whether it has a positive or negative balance. 
B) Cash equivalents. 
C) Cash that will be used to close a plant in eighteen months. 
D) Restricted cash that will not be used within the upcoming year.

A deposit made by a company will appear on the bank statement as a(n)

From an internal control standpoint the asset most susceptible to improper diversion and use is

Which of the following would be added to the balance per books on a bank reconciliation?

Blank checks

The most important element of the fraud triangle is rationalization.

Expected direct materials purchases for Rees Company are $210000 in the first quarter and $270000 in the second quarter.Forty percent of the purchases are paid in cash as incurred and the balance is paid in the following quarter.The budgeted cash payments for purchases in the second quarter are:

Which of the following is an appropriate internal control activity for cash?

Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse.An assessment of this situation indicates

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682 the appropriate treatment on the bank reconciliation would be to

Bishop Company wrote checks totaling $51240 during October (its first month of operations) and $55950 during November.$48720 of these checks cleared the bank in October and $54660 cleared the bank in November.What was the amount of outstanding checks on November 30?

An example of segregation of duties is having a check signer recording cash disbursements.

Internal control measures

Each of the following is a feature of internal control except

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Supervisors counting cash receipts daily is an example of

Which item is a current asset?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 5: Fraud, Internal Control, and Cash

A deposit made by a company will appear on the bank statement as a(n)

From an internal control standpoint the asset most susceptible to improper diversion and use is

Which of the following would be added to the balance per books on a bank reconciliation?

Blank checks

The most important element of the fraud triangle is rationalization.

Expected direct materials purchases for Rees Company are $210000 in the first quarter and $270000 in the second quarter.Forty percent of the purchases are paid in cash as incurred and the balance is paid in the following quarter.The budgeted cash payments for purchases in the second quarter are:

Which of the following is an appropriate internal control activity for cash?

Joe is a warehouse custodian and also maintains the accounting record of the inventory held at the warehouse.An assessment of this situation indicates

If a check correctly written and paid by the bank for $628 is incorrectly recorded on the company's books for $682 the appropriate treatment on the bank reconciliation would be to

Bishop Company wrote checks totaling $51240 during October (its first month of operations) and $55950 during November.$48720 of these checks cleared the bank in October and $54660 cleared the bank in November.What was the amount of outstanding checks on November 30?

An example of segregation of duties is having a check signer recording cash disbursements.

Internal control measures

Each of the following is a feature of internal control except

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Supervisors counting cash receipts daily is an example of

Which item is a current asset?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters