Question 1

Which of the following is a security procedure designed for e-commerce which rearranges text messages by a mathematical process?

Accepted Answer

A)  Trojans 
B)  Firewalls 
C)  Encryption 
D)  Phishing 
A)  Trojans 
B)  Firewalls 
C)  Encryption 
D)  Phishing

Question 2

The cash balance in a company's general ledger and the bank's balance on the bank statement will generally be different because of the time lag in recording transactions.

Accepted Answer

A) True 
 B)False

Question 3

Before any internal control procedure is initiated,a question which should be addressed by the company is:

Accepted Answer

A)  Will this stop all theft? 
B)  Is this the best security money can buy? 
C)  How much benefit will be derived from the cost of the procedure? 
D)  Will this prevent all accounting errors? 
A)  Will this stop all theft? 
B)  Is this the best security money can buy? 
C)  How much benefit will be derived from the cost of the procedure? 
D)  Will this prevent all accounting errors?

Question 4

The control environment is one of the five components by which a company can achieve its internal control objectives.

Accepted Answer

A) True 
 B)False

Question 5

If the bank reconciliation includes outstanding checks,no journal entries are required.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following must be signed by the person authorized to write checks drawn on a checking account at a bank?

Accepted Answer

A)  A signature card 
B)  A bank statement 
C)  A deposit ticket 
D)  A bank reconciliation 
A)  A signature card 
B)  A bank statement 
C)  A deposit ticket 
D)  A bank reconciliation

Question 7

Which of the following items are both reconciling items on the bank side of the reconciliation?

Accepted Answer

A)  Outstanding checks and correction of book error 
B)  Deposit in transit and NSF check 
C)  Deposit in transit and outstanding checks 
D)  Bank service charge and correction of book error 
A)  Outstanding checks and correction of book error 
B)  Deposit in transit and NSF check 
C)  Deposit in transit and outstanding checks 
D)  Bank service charge and correction of book error

Question 8

Which of the following is NOT a problem that must be addressed in the internal controls for commerce?

Accepted Answer

A)  Trojans 
B)  Stolen credit-card numbers 
C)  Phishing expeditions 
D)  Separation of duties 
A)  Trojans 
B)  Stolen credit-card numbers 
C)  Phishing expeditions 
D)  Separation of duties

Question 9

Which of the following describes the internal control component monitoring of controls?

Accepted Answer

A)  Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate. 
B)  Monitoring of controls is the "tone at the top" of the business. 
C)  Monitoring of controls is designed to ensure that the business's goals are achieved. 
D)  A company must identify its risks. 
A)  Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate. 
B)  Monitoring of controls is the "tone at the top" of the business. 
C)  Monitoring of controls is designed to ensure that the business's goals are achieved. 
D)  A company must identify its risks.

Question 10

A strong computer firewall is an essential element of good internal controls for e-commerce.

Accepted Answer

A) True 
 B)False

Question 11

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following describes the internal control procedure documents?

Accepted Answer

A)  Mandatory vacations will improve internal control. 
B)  Separate the custody of assets from accounting. 
C)  Prenumber invoices and other documents. 
D)  A company should purchase a fireproof vault. 
A)  Mandatory vacations will improve internal control. 
B)  Separate the custody of assets from accounting. 
C)  Prenumber invoices and other documents. 
D)  A company should purchase a fireproof vault.

Question 13

Separation of duties limits fraud and promotes the accuracy of the account records.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is used by many companies to separate cash duties and establish stronger control over cash receipts?

Accepted Answer

A)  An encryption system 
B)  An imprest system 
C)  A lock-box system 
D)  A firewall system 
A)  An encryption system 
B)  An imprest system 
C)  A lock-box system 
D)  A firewall system

Question 15

Internal control is the organizational plan and all the related measures adopted by an entity to safeguard assets,encourage employees to follow company policy,promote operational efficiency,and ensure accurate and reliable accounting records.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is the most basic internal control for cash?

Accepted Answer

A)  Keeping money in a bank account 
B)  Checking for counterfeit bills 
C)  Counting cash receipts twice 
D)  Internal audit of cash procedures 
A)  Keeping money in a bank account 
B)  Checking for counterfeit bills 
C)  Counting cash receipts twice 
D)  Internal audit of cash procedures

Question 17

Check Number 6135 for $576 was incorrectly entered as $657.Which adjustment needs to be made?

Accepted Answer

A)  Decrease the book balance. 
B)  Decrease the bank statement balance. 
C)  Increase the book balance. 
D)  Increase the bank statement balance. 
A)  Decrease the book balance. 
B)  Decrease the bank statement balance. 
C)  Increase the book balance. 
D)  Increase the bank statement balance.

Question 18

A company received a bank statement with a balance of $5,350.Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500),two outstanding checks totaling $720,a service charge of $15,a deposit in transit of $180,and interest revenue of $21.What is the adjusted bank balance?

Accepted Answer

A)  $4,636 
B)  $4,610 
C)  $5,016 
D)  $4,810 
A)  $4,636 
B)  $4,610 
C)  $5,016 
D)  $4,810

Question 19

Which of the following is a common tactic to overcome internal controls?

Accepted Answer

A)  Encryption 
B)  Firewalls 
C)  Collusion 
D)  Separation of duties 
A)  Encryption 
B)  Firewalls 
C)  Collusion 
D)  Separation of duties

Question 20

A petty cash fund was established with a $250 balance.It currently has cash of $31 and petty cash tickets totaling $219.Which of the following would be included in the entry to replenish the fund?

Accepted Answer

A)  A credit to Petty cash for $219 
B)  A debit to Petty cash for $31 
C)  A credit to Cash in bank for $31 
D)  A credit to Cash in bank for $219 
A)  A credit to Petty cash for $219 
B)  A debit to Petty cash for $31 
C)  A credit to Cash in bank for $31 
D)  A credit to Cash in bank for $219

Which of the following is a security procedure designed for e-commerce which rearranges text messages by a mathematical process?

The cash balance in a company's general ledger and the bank's balance on the bank statement will generally be different because of the time lag in recording transactions.

Before any internal control procedure is initiated,a question which should be addressed by the company is:

The control environment is one of the five components by which a company can achieve its internal control objectives.

If the bank reconciliation includes outstanding checks,no journal entries are required.

Which of the following must be signed by the person authorized to write checks drawn on a checking account at a bank?

Which of the following items are both reconciling items on the bank side of the reconciliation?

Which of the following is NOT a problem that must be addressed in the internal controls for commerce?

Which of the following describes the internal control component monitoring of controls?

A strong computer firewall is an essential element of good internal controls for e-commerce.

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Which of the following describes the internal control procedure documents?

Separation of duties limits fraud and promotes the accuracy of the account records.

Which of the following is used by many companies to separate cash duties and establish stronger control over cash receipts?

Internal control is the organizational plan and all the related measures adopted by an entity to safeguard assets,encourage employees to follow company policy,promote operational efficiency,and ensure accurate and reliable accounting records.

Which of the following is the most basic internal control for cash?

Check Number 6135 for $576 was incorrectly entered as $657.Which adjustment needs to be made?

A company received a bank statement with a balance of $5,350.Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500),two outstanding checks totaling $720,a service charge of $15,a deposit in transit of $180,and interest revenue of $21.What is the adjusted bank balance?

Which of the following is a common tactic to overcome internal controls?

A petty cash fund was established with a $250 balance.It currently has cash of $31 and petty cash tickets totaling $219.Which of the following would be included in the entry to replenish the fund?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 7: Internal Control and Cash

Which of the following is a security procedure designed for e-commerce which rearranges text messages by a mathematical process?

The cash balance in a company's general ledger and the bank's balance on the bank statement will generally be different because of the time lag in recording transactions.

Before any internal control procedure is initiated,a question which should be addressed by the company is:

The control environment is one of the five components by which a company can achieve its internal control objectives.

If the bank reconciliation includes outstanding checks,no journal entries are required.

Which of the following must be signed by the person authorized to write checks drawn on a checking account at a bank?

Which of the following items are both reconciling items on the bank side of the reconciliation?

Which of the following is NOT a problem that must be addressed in the internal controls for commerce?

Which of the following describes the internal control component monitoring of controls?

A strong computer firewall is an essential element of good internal controls for e-commerce.

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Which of the following describes the internal control procedure documents?

Separation of duties limits fraud and promotes the accuracy of the account records.

Which of the following is used by many companies to separate cash duties and establish stronger control over cash receipts?

Internal control is the organizational plan and all the related measures adopted by an entity to safeguard assets,encourage employees to follow company policy,promote operational efficiency,and ensure accurate and reliable accounting records.

Which of the following is the most basic internal control for cash?

Check Number 6135 for $576 was incorrectly entered as $657.Which adjustment needs to be made?

A company received a bank statement with a balance of $5,350.Reconciling items included a bookkeeper error of $200 (a $300 check recorded as $500),two outstanding checks totaling $720,a service charge of $15,a deposit in transit of $180,and interest revenue of $21.What is the adjusted bank balance?

Which of the following is a common tactic to overcome internal controls?

A petty cash fund was established with a $250 balance.It currently has cash of $31 and petty cash tickets totaling $219.Which of the following would be included in the entry to replenish the fund?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters