Question 1

If an accountant takes an action that is deliberately designed to improve the company's financial results,it would be considered unethical if:

Accepted Answer

A)  it deliberately misrepresents facts. 
B)  the action was taken specifically for the purpose of showing higher income. 
C)  the action will require a special journal entry. 
D)  the action is not in the best interests of the business owners. 
A)  it deliberately misrepresents facts. 
B)  the action was taken specifically for the purpose of showing higher income. 
C)  the action will require a special journal entry. 
D)  the action is not in the best interests of the business owners.

Question 2

Check Number 367 for $33.52 was incorrectly entered as $33.25.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 3

In a system of good internal control,a payment to a supplier requires which documents for proper approval?

Accepted Answer

A)  A journal entry, a supplier invoice, and a description of the goods being purchased 
B)  A receiving report, an invoice, and a purchase order 
C)  A purchase order, a journal entry, and a price catalog 
D)  A supplier invoice, a bill of lading, and the supplier's financial statements 
A)  A journal entry, a supplier invoice, and a description of the goods being purchased 
B)  A receiving report, an invoice, and a purchase order 
C)  A purchase order, a journal entry, and a price catalog 
D)  A supplier invoice, a bill of lading, and the supplier's financial statements

Question 4

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Accepted Answer

A)  bank statement 
B)  deposit receipt 
C)  bank reconciliation 
D)  remittance advice 
A)  bank statement 
B)  deposit receipt 
C)  bank reconciliation 
D)  remittance advice

Question 5

Which of the following statements describes an invoice from a supplier?

Accepted Answer

A)  It is an order to purchase goods from a supplier. 
B)  It is a statement from the supplier showing the goods purchased and the amount due. 
C)  It is a report showing that the goods have been received in good condition, as ordered. 
D)  It is a document authorizing a payment to a supplier. 
A)  It is an order to purchase goods from a supplier. 
B)  It is a statement from the supplier showing the goods purchased and the amount due. 
C)  It is a report showing that the goods have been received in good condition, as ordered. 
D)  It is a document authorizing a payment to a supplier.

Question 6

The following information is needed to reconcile the cash balance for Woods Paper Products. • A deposit of $5,794.62 is in transit.
• Outstanding checks total $1,533.25.
• The book balance is $5,695.62.
• The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent.
• The bank balance at February 28,2008 was $16,500.25.
• A deposit of $300 was credited by the bank for $3,000.
• A customer's check for $1,280 was returned for nonsufficient funds.
• The bank service charge is $70.
-
What was the adjusted bank balance?

Accepted Answer

A)  $6,472.38 
B)  $18,061.62 
C)  $9,355.63 
D)  $14,938.88 
A)  $6,472.38 
B)  $18,061.62 
C)  $9,355.63 
D)  $14,938.88

Question 7

In the following situation,which internal control procedure needs strengthening?
- Hofstra Services hired a new accountant to be responsible for the petty cash fund and the cash receipts.The newly hired employee has an accounting degree and a criminal record.

Accepted Answer

A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents 
A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents

Question 8

The following information is available for Andersen Company for the month ending June 30,2014

. • Balance per the bank statement is $10,241.43.
• Balance per books is $9,745.06.
• Check #506 for $1,948.52 and check #510 for $1,800.25 were not shown on the June 30 bank statement.
• A deposit in transit of $5,113.40 had not been received by the bank when the bank statement was generated.
• A bank debit memo indicated an NSF check in the amount of $79 written by Bruce Garrett to Andersen Company on June 13.
• A bank credit memo indicated a note collected by the bank of $1,900 and interest revenue of $75 on June 20.
• The bank statement indicated service charges of $35.

-
What is the adjusted book balance?

Accepted Answer

A)  $7,884.06 
B)  $11,606.06 
C)  $11,109.69 
D)  $7,971.29 
A)  $7,884.06 
B)  $11,606.06 
C)  $11,109.69 
D)  $7,971.29

Question 9

Which of the following describes the internal control component information system?

Accepted Answer

A)  Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B)  Control procedures are designed to ensure that the business's goals are achieved. 
C)  Only authorized users have access to various parts of the information system. 
D)  The information system is the "tone at the top" of the business. 
A)  Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B)  Control procedures are designed to ensure that the business's goals are achieved. 
C)  Only authorized users have access to various parts of the information system. 
D)  The information system is the "tone at the top" of the business.

Question 10

Risk assessment is the "tone at the top" of a business,starting with the owner and the top managers.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following describes collusion?

Accepted Answer

A)  When bogus websites acquire passwords and account numbers fraudulently 
B)  When two or more people cooperate together to defraud a company 
C)  When one employee steals from a company 
D)  When a company defrauds its suppliers by making false claims 
A)  When bogus websites acquire passwords and account numbers fraudulently 
B)  When two or more people cooperate together to defraud a company 
C)  When one employee steals from a company 
D)  When a company defrauds its suppliers by making false claims

Question 12

Cash is the most liquid of all company assets.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements about internal control is FALSE?

Accepted Answer

A)  Internal auditors insure that employees follow company policies. 
B)  The treasurer is the officer ultimately responsible for writing of checks. 
C)  External auditors are employees of the company. 
D)  The control environment is known as the "tone at the top." 
A)  Internal auditors insure that employees follow company policies. 
B)  The treasurer is the officer ultimately responsible for writing of checks. 
C)  External auditors are employees of the company. 
D)  The control environment is known as the "tone at the top."

Question 14

Which of the following statements describes a voucher?

Accepted Answer

A)  It is an order to purchase goods from a supplier. 
B)  It is a statement from the supplier showing the goods purchased and the amount due. 
C)  It is a report showing that the goods have been received in good condition, as ordered. 
D)  It is a document authorizing a payment to a supplier. 
A)  It is an order to purchase goods from a supplier. 
B)  It is a statement from the supplier showing the goods purchased and the amount due. 
C)  It is a report showing that the goods have been received in good condition, as ordered. 
D)  It is a document authorizing a payment to a supplier.

Question 15

Which of the following is TRUE about a bank reconciliation?

Accepted Answer

A)  A bank reconciliation should not be prepared by an employee who handles cash transactions. 
B)  A bank reconciliation cannot be prepared with online banking. 
C)  A bank reconciliation is a financial statement. 
D)  A bank reconciliation guarantees that no errors have been made. 
A)  A bank reconciliation should not be prepared by an employee who handles cash transactions. 
B)  A bank reconciliation cannot be prepared with online banking. 
C)  A bank reconciliation is a financial statement. 
D)  A bank reconciliation guarantees that no errors have been made.

Question 16

In the following situation,which internal control procedure needs strengthening?
- At Hofstra Services,the accounting clerk fills out unnumbered purchase order forms for purchases of supplies.An operations engineer completes the form with a detailed description of the supplies being ordered,and the operations manager approves the purchase and passes the purchase order back to the accountant for processing.

Accepted Answer

A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents 
A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents

Question 17

When a check is issued,the party who is paying the cash is referred to as the:

Accepted Answer

A)  payee. 
B)  maker. 
C)  bank signatory. 
D)  depositor. 
A)  payee. 
B)  maker. 
C)  bank signatory. 
D)  depositor.

Question 18

Reducing expense to increase operating profit is representative of:

Accepted Answer

A)  safeguarding assets. 
B)  following company policies. 
C)  promoting operational efficiency. 
D)  ensuring accurate, reliable accounting records. 
A)  safeguarding assets. 
B)  following company policies. 
C)  promoting operational efficiency. 
D)  ensuring accurate, reliable accounting records.

Question 19

Internal auditors evaluate company controls to ensure the accuracy of financial statements.

Accepted Answer

A) True 
 B)False

Question 20

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.What is this system called?

Accepted Answer

A)  A control system 
B)  A voucher system 
C)  A balanced system 
D)  An imprest system 
A)  A control system 
B)  A voucher system 
C)  A balanced system 
D)  An imprest system

If an accountant takes an action that is deliberately designed to improve the company's financial results,it would be considered unethical if:

Check Number 367 for $33.52 was incorrectly entered as $33.25.Which adjustment needs to be made?

In a system of good internal control,a payment to a supplier requires which documents for proper approval?

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Which of the following statements describes an invoice from a supplier?

In the following situation,which internal control procedure needs strengthening? - Hofstra Services hired a new accountant to be responsible for the petty cash fund and the cash receipts.The newly hired employee has an accounting degree and a criminal record.

Which of the following describes the internal control component information system?

Risk assessment is the "tone at the top" of a business,starting with the owner and the top managers.

Which of the following describes collusion?

Cash is the most liquid of all company assets.

Which of the following statements about internal control is FALSE?

Which of the following statements describes a voucher?

Which of the following is TRUE about a bank reconciliation?

When a check is issued,the party who is paying the cash is referred to as the:

Reducing expense to increase operating profit is representative of:

Internal auditors evaluate company controls to ensure the accuracy of financial statements.

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.What is this system called?

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

If an accountant takes an action that is deliberately designed to improve the company's financial results,it would be considered unethical if:

Check Number 367 for $33.52 was incorrectly entered as $33.25.Which adjustment needs to be made?

In a system of good internal control,a payment to a supplier requires which documents for proper approval?

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Which of the following statements describes an invoice from a supplier?

In the following situation,which internal control procedure needs strengthening? - Hofstra Services hired a new accountant to be responsible for the petty cash fund and the cash receipts.The newly hired employee has an accounting degree and a criminal record.

Which of the following describes the internal control component information system?

Risk assessment is the "tone at the top" of a business,starting with the owner and the top managers.

Which of the following describes collusion?

Cash is the most liquid of all company assets.

Which of the following statements about internal control is FALSE?

Which of the following statements describes a voucher?

Which of the following is TRUE about a bank reconciliation?

When a check is issued,the party who is paying the cash is referred to as the:

Reducing expense to increase operating profit is representative of:

Internal auditors evaluate company controls to ensure the accuracy of financial statements.

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.What is this system called?

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