Question 1

Which of the following describes the internal control procedure separation of duties?

Accepted Answer

A)  Cashiers must not have access to accounting records. 
B)  External auditors will monitor internal controls. 
C)  The information system is critical. 
D)  Prenumber invoices and other documents. 
A)  Cashiers must not have access to accounting records. 
B)  External auditors will monitor internal controls. 
C)  The information system is critical. 
D)  Prenumber invoices and other documents.

Question 2

The bank collected a note receivable of $1,000.How would this information be included on the bank reconciliation?

Accepted Answer

A)  An addition on the bank side 
B)  A deduction on the book side 
C)  An addition on the book side 
D)  A deduction on the bank side 
A)  An addition on the bank side 
B)  A deduction on the book side 
C)  An addition on the book side 
D)  A deduction on the bank side

Question 3

Which of the following describes the internal control procedure assignment of responsibilities?

Accepted Answer

A)  To validate their accounting records, a company should have an audit by an external accountant. 
B)  The company should separate the custody of assets from accounting. 
C)  The external auditors will monitor internal controls. 
D)  Have clearly assigned responsibilities for each position. 
A)  To validate their accounting records, a company should have an audit by an external accountant. 
B)  The company should separate the custody of assets from accounting. 
C)  The external auditors will monitor internal controls. 
D)  Have clearly assigned responsibilities for each position.

Question 4

The following information is available for Matt's Unlimited Company for the current month.What is the adjusted book balance on the bank reconciliation? $$\begin{array} { | l | r | } 
\hline \text { Book balance end of the month } & \$ 5,575 \
\hline \text { Outstanding checks } & 584 \
\hline \text { Deposits in transit } & 2,500 \
\hline \text { Service charges } & 75 \
\hline \text { Interest revenue } & 25 \
\hline
\end{array}$$

Accepted Answer

A)  $7,466 
B)  $5,500 
C)  $5,550 
D)  $5,525 
A)  $7,466 
B)  $5,500 
C)  $5,550 
D)  $5,525

Question 5

Which of the following is a benefit of online banking?

Accepted Answer

A)  The business can reconcile to the bank's balance at any time. 
B)  The bank reconciliation is not necessary. 
C)  The business can reduce their internal controls over cash receipts. 
D)  A company's book balance will always equal the bank's balance. 
A)  The business can reconcile to the bank's balance at any time. 
B)  The bank reconciliation is not necessary. 
C)  The business can reduce their internal controls over cash receipts. 
D)  A company's book balance will always equal the bank's balance.

Question 6

Which of the following describes the internal control component risk assessment?

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

Question 7

In a large company,the person who is responsible for writing checks is the:

Accepted Answer

A)  CEO. 
B)  CFO. 
C)  controller. 
D)  treasurer. 
A)  CEO. 
B)  CFO. 
C)  controller. 
D)  treasurer.

Question 8

A company check for payment must be signed by:

Accepted Answer

A)  any employee of the company. 
B)  a bank employee. 
C)  a person specifically authorized by the company. 
D)  the external auditor. 
A)  any employee of the company. 
B)  a bank employee. 
C)  a person specifically authorized by the company. 
D)  the external auditor.

Question 9

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 bank balance?

Accepted Answer

A)  $8,876.80 
B)  $11,606.06 
C)  $19,103.60 
D)  $8,152.43 
A)  $8,876.80 
B)  $11,606.06 
C)  $19,103.60 
D)  $8,152.43

Question 10

In a bank reconciliation,a deposit in transit will be shown on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 11

A petty cash fund was established with a $300 balance.It currently has cash of $77 and petty cash tickets totaling $222 for travel expense.Please provide the journal entry to record the replenishment of the account.
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\hline \quad\quad\quad&\quad&\quad \
\hline \\hline \
\hline
\end{array}$$

Accepted Answer

This question is no

Question 12

In the following situation,which internal control procedure needs strengthening?
- At Hofstra Services,the operations accountant is responsible for safeguarding and maintaining the pipe inventory and also to record inventory transactions into the journal.A separate accounting clerk keeps records of the cash receipts and payments.The treasurer signs checks and approves contracts.

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 13

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

Accepted Answer

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

Question 14

In reconciling a bank statement,the bank balance is $1,800 and the checkbook balance is $1,205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

Accepted Answer

A)  There are outstanding checks. 
B)  The bank has deducted certain amounts for bank service charges. 
C)  A deposit in transit was made at the end of the month. 
D)  The company erroneously recorded a check for an amount less than actual. 
A)  There are outstanding checks. 
B)  The bank has deducted certain amounts for bank service charges. 
C)  A deposit in transit was made at the end of the month. 
D)  The company erroneously recorded a check for an amount less than actual.

Question 15

Which of the following is the first step in the purchasing and payment process?

Accepted Answer

A)  The supplier ships the goods and sends an invoice to the purchaser. 
B)  The purchaser sends a check to the supplier. 
C)  The purchaser sends a purchase order to the supplier. 
D)  The purchase receives the inventory and prepares a receiving report. 
A)  The supplier ships the goods and sends an invoice to the purchaser. 
B)  The purchaser sends a check to the supplier. 
C)  The purchaser sends a purchase order to the supplier. 
D)  The purchase receives the inventory and prepares a receiving report.

Question 16

On a bank reconciliation,deposits in transit are subtracted on the book side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 17

A petty cash fund was established with a $400 balance.It currently has cash of $15 and petty cash tickets as shown below. $\begin{array}{|l|r|}
\hline \text { Travel expense } & \$ 120 \
\hline \text { Office supplies } & \$ 200 \
\hline \text { Equipment rental expense } & \$ 70\\hline 
\end{array}$ The journal entry to replenish the account would be which of the following:

Accepted Answer

A)  Debit to Cash short & over for $5 
B)  Credit Cash short & over for $5 
C)  Debit Petty cash fund $5 
D)  Credit Petty cash fund $5 
A)  Debit to Cash short & over for $5 
B)  Credit Cash short & over for $5 
C)  Debit Petty cash fund $5 
D)  Credit Petty cash fund $5

Question 18

Which is the MOST liquid of assets?

Accepted Answer

A)  Cash 
B)  Accounts receivable 
C)  Inventory 
D)  Supplies 
A)  Cash 
B)  Accounts receivable 
C)  Inventory 
D)  Supplies

Question 19

Under the Sarbanes-Oxley Act,accounting firms are prohibited from both auditing a client and providing certain consulting services for the same client.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following describes the control environment?

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)  The control environment is the "tone at the top" of the business. 
C)  The control environment 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 monitor the controls to ensure that the accounting records are accurate. 
B)  The control environment is the "tone at the top" of the business. 
C)  The control environment is designed to ensure that the business's goals are achieved. 
D)  A company must identify its risks.

Which of the following describes the internal control procedure separation of duties?

The bank collected a note receivable of $1,000.How would this information be included on the bank reconciliation?

Which of the following describes the internal control procedure assignment of responsibilities?

The following information is available for Matt's Unlimited Company for the current month.What is the adjusted book balance on the bank reconciliation? Book balance end of the month \ 5,575 Outstanding checks 584 Deposits in transit 2,500 Service charges 75 Interest revenue 25

Which of the following is a benefit of online banking?

Which of the following describes the internal control component risk assessment?

In a large company,the person who is responsible for writing checks is the:

A company check for payment must be signed by:

In a bank reconciliation,a deposit in transit will be shown on the bank side of the reconciliation.

A petty cash fund was established with a $300 balance.It currently has cash of $77 and petty cash tickets totaling $222 for travel expense.Please provide the journal entry to record the replenishment of the account.

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

In reconciling a bank statement,the bank balance is $1,800 and the checkbook balance is $1,205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

Which of the following is the first step in the purchasing and payment process?

On a bank reconciliation,deposits in transit are subtracted on the book side of the reconciliation.

A petty cash fund was established with a $400 balance.It currently has cash of $15 and petty cash tickets as shown below. Travel expense \ 120 Office supplies \ 200 Equipment rental expense \ 70 The journal entry to replenish the account would be which of the following:

Which is the MOST liquid of assets?

Under the Sarbanes-Oxley Act,accounting firms are prohibited from both auditing a client and providing certain consulting services for the same client.

Which of the following describes the control environment?

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 describes the internal control procedure separation of duties?

The bank collected a note receivable of $1,000.How would this information be included on the bank reconciliation?

Which of the following describes the internal control procedure assignment of responsibilities?

The following information is available for Matt's Unlimited Company for the current month.What is the adjusted book balance on the bank reconciliation? Book balance end of the month \ 5,575 Outstanding checks 584 Deposits in transit 2,500 Service charges 75 Interest revenue 25

Which of the following is a benefit of online banking?

Which of the following describes the internal control component risk assessment?

In a large company,the person who is responsible for writing checks is the:

A company check for payment must be signed by:

In a bank reconciliation,a deposit in transit will be shown on the bank side of the reconciliation.

A petty cash fund was established with a $300 balance.It currently has cash of $77 and petty cash tickets totaling $222 for travel expense.Please provide the journal entry to record the replenishment of the account.

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

In reconciling a bank statement,the bank balance is $1,800 and the checkbook balance is $1,205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

Which of the following is the first step in the purchasing and payment process?

On a bank reconciliation,deposits in transit are subtracted on the book side of the reconciliation.

A petty cash fund was established with a $400 balance.It currently has cash of $15 and petty cash tickets as shown below. Travel expense \ 120 Office supplies \ 200 Equipment rental expense \ 70 The journal entry to replenish the account would be which of the following:

Which is the MOST liquid of assets?

Under the Sarbanes-Oxley Act,accounting firms are prohibited from both auditing a client and providing certain consulting services for the same client.

Which of the following describes the control environment?

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