Question 1

The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to:

Accepted Answer

A) report on the effectiveness of the company's internal controls. 
B) report on any fraud and theft detected in the company. 
C) report on the state of the economy and likelihood of fraud. 
D) report on the financial activities of the company. 
A) report on the effectiveness of the company's internal controls. 
B) report on any fraud and theft detected in the company. 
C) report on the state of the economy and likelihood of fraud. 
D) report on the financial activities of the company. A

Question 2

Denominator in the ratio of cash to monthly cash expense is calculated as .

Accepted Answer

A) total revenues divided by 12 
B) net cash flows from investing activities divided by 12 
C) earnings before taxes divided by 12 
D) net cash flows from operations divided by 12 
A) total revenues divided by 12 
B) net cash flows from investing activities divided by 12 
C) earnings before taxes divided by 12 
D) net cash flows from operations divided by 12 D

Question 3

An element of internal control is:

Accepted Answer

A) risk assessment. 
B) journals. 
C) subsidiary ledgers. 
D) controlling accounts. 
A) risk assessment. 
B) journals. 
C) subsidiary ledgers. 
D) controlling accounts. A

Question 4

A check drawn by a depositor for $295 in payment of a liability was recorded in the depositor's book as $925.The $630 difference would be included on the bank reconciliation as a(n):

Accepted Answer

A) addition to the cash balance per books. 
B) addition to the cash balance per bank. 
C) deduction from the cash balance per bank. 
D) deduction from the cash balance per books. 
A) addition to the cash balance per books. 
B) addition to the cash balance per bank. 
C) deduction from the cash balance per bank. 
D) deduction from the cash balance per books.

Question 5

Discuss what would be included under personnel policies.

Accepted Answer

Personnel policies would inclu

Question 6

On the bank's accounting records,customers' accounts are normally shown as a(n):

Accepted Answer

A) revenue. 
B) liability. 
C) asset. 
D) expenses. 
A) revenue. 
B) liability. 
C) asset. 
D) expenses.

Question 7

Using the following information,list the items that will require adjustments to the accounts of Salem Co.Also,indicate which accounts will increase or decrease due to the adjustment.

(a)	The bank statement balance is $2,597.
(b)	The cash account balance is $2,680.
(c)	Outstanding checks amounted to $703.
(d)	Deposits in transit are $732.
(e)	The bank service charge is $25.
(f)	Interest added to the checking account by the bank is $7.
(g)	A check drawn for $59 was incorrectly charged by the bank as $95.

Accepted Answer

(e)Service charge $25; Cash wi

Question 8

Information and communication are essential elements of an organization's internal control.

Accepted Answer

A) True 
 B)False

Question 9

The purpose of the Sarbanes-Oxley Act of 2002 is to:

Accepted Answer

A) restore public confidence and trust in the financial statements of publicly held companies. 
B) require all companies to prepare financial statements. 
C) protect companies from demands of investors,stockholders,and creditors. 
D) do all of these. 
A) restore public confidence and trust in the financial statements of publicly held companies. 
B) require all companies to prepare financial statements. 
C) protect companies from demands of investors,stockholders,and creditors. 
D) do all of these.

Question 10

Money orders are considered cash.

Accepted Answer

A) True 
 B)False

Question 11

Minimum cash balance maintained in the bank account is called line of credit.

Accepted Answer

A) True 
 B)False

Question 12

An element of internal control is:

Accepted Answer

A) business. 
B) management. 
C) monitoring. 
D) personnel policies. 
A) business. 
B) management. 
C) monitoring. 
D) personnel policies.

Question 13

Explain why one person should not be permitted to purchase,receive,and pay for supplies.

Accepted Answer

Supplies may be stolen by the employee o

Question 14

All bank memorandums reported on the bank reconciliation require entries in the depositor's accounts.

Accepted Answer

A) True 
 B)False

Question 15

A voucher is the notification accompanying the check issued to a creditor that indicates the specific invoice being paid.

Accepted Answer

A) True 
 B)False

Question 16

Risks can be analyzed to:

Accepted Answer

A) assess their likelihood of occurring. 
B) separate responsibilities for related operations. 
C) observe employees' behavior and the accounting system. 
D) ensure compliance with reporting,legal,and regulatory requirements. 
A) assess their likelihood of occurring. 
B) separate responsibilities for related operations. 
C) observe employees' behavior and the accounting system. 
D) ensure compliance with reporting,legal,and regulatory requirements.

Question 17

A check for $456 was erroneously charged by the bank as $654.In order for the bank reconciliation to balance,you must subtract $198 from the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 18

The ratio of cash to monthly cash expenses can be used to .

Accepted Answer

A) assess how long a company with positive cash flows from investing activities can continue to operate 
B) assess how long a company with negative cash flows from operations can continue to operate 
C) assess how long a company with negative cash flows from investing activities can continue to operate 
D) assess how long a company with positive cash flows from financing activities can continue to operate 
A) assess how long a company with positive cash flows from investing activities can continue to operate 
B) assess how long a company with negative cash flows from operations can continue to operate 
C) assess how long a company with negative cash flows from investing activities can continue to operate 
D) assess how long a company with positive cash flows from financing activities can continue to operate

Question 19

When a firm uses internal auditors,it is adhering to which of the following internal control elements?

Accepted Answer

A) Risk assessment 
B) Control procedures 
C) Monitoring 
D) Information and communication 
A) Risk assessment 
B) Control procedures 
C) Monitoring 
D) Information and communication

Question 20

For efficiency of operations and better control over cash,a company should maintain only one bank account.

Accepted Answer

A) True 
 B)False

The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to:

Denominator in the ratio of cash to monthly cash expense is calculated as .

An element of internal control is:

A check drawn by a depositor for $295 in payment of a liability was recorded in the depositor's book as $925.The $630 difference would be included on the bank reconciliation as a(n):

Discuss what would be included under personnel policies.

On the bank's accounting records,customers' accounts are normally shown as a(n):

Information and communication are essential elements of an organization's internal control.

The purpose of the Sarbanes-Oxley Act of 2002 is to:

Money orders are considered cash.

Minimum cash balance maintained in the bank account is called line of credit.

An element of internal control is:

Explain why one person should not be permitted to purchase,receive,and pay for supplies.

All bank memorandums reported on the bank reconciliation require entries in the depositor's accounts.

A voucher is the notification accompanying the check issued to a creditor that indicates the specific invoice being paid.

Risks can be analyzed to:

A check for $456 was erroneously charged by the bank as $654.In order for the bank reconciliation to balance,you must subtract $198 from the bank statement balance.

The ratio of cash to monthly cash expenses can be used to .

When a firm uses internal auditors,it is adhering to which of the following internal control elements?

For efficiency of operations and better control over cash,a company should maintain only one bank account.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 5: Sarbanes-Oxley, internal Control, and Cash

The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to:

Denominator in the ratio of cash to monthly cash expense is calculated as .

An element of internal control is:

A check drawn by a depositor for $295 in payment of a liability was recorded in the depositor's book as $925.The $630 difference would be included on the bank reconciliation as a(n):

Discuss what would be included under personnel policies.

On the bank's accounting records,customers' accounts are normally shown as a(n):

Information and communication are essential elements of an organization's internal control.

The purpose of the Sarbanes-Oxley Act of 2002 is to:

Money orders are considered cash.

Minimum cash balance maintained in the bank account is called line of credit.

An element of internal control is:

Explain why one person should not be permitted to purchase,receive,and pay for supplies.

All bank memorandums reported on the bank reconciliation require entries in the depositor's accounts.

A voucher is the notification accompanying the check issued to a creditor that indicates the specific invoice being paid.

Risks can be analyzed to:

A check for $456 was erroneously charged by the bank as $654.In order for the bank reconciliation to balance,you must subtract $198 from the bank statement balance.

The ratio of cash to monthly cash expenses can be used to .

When a firm uses internal auditors,it is adhering to which of the following internal control elements?

For efficiency of operations and better control over cash,a company should maintain only one bank account.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters