Question 1

Segregation and rotation of duties is most effective in

Accepted Answer

A) increasing cost of goods sold. 
B) assisting management in overriding controls. 
C) preventing collusion. 
D) misappropriating company assets. 
A) increasing cost of goods sold. 
B) assisting management in overriding controls. 
C) preventing collusion. 
D) misappropriating company assets.

Question 2

Which of the following statements is true?

Accepted Answer

A) The audit committee provides contact between the board of directors and the key officers of the company. 
B) The audit committee has become less involved in the financial accounting system as a result of the Foreign Corrupt Practices Act. 
C) The audit committee is a subset of individuals on the board of directors that acts as a direct contact between the stockholders and the independent accounting firm. 
D) The board of directors consists of the company's external auditors. 
A) The audit committee provides contact between the board of directors and the key officers of the company. 
B) The audit committee has become less involved in the financial accounting system as a result of the Foreign Corrupt Practices Act. 
C) The audit committee is a subset of individuals on the board of directors that acts as a direct contact between the stockholders and the independent accounting firm. 
D) The board of directors consists of the company's external auditors.

Question 3

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Accepted Answer

A) Add it to the bank balance 
B) Add it to the book balance 
C) Deduct it from the bank balance 
D) Deduct it from the book balance 
A) Add it to the bank balance 
B) Add it to the book balance 
C) Deduct it from the bank balance 
D) Deduct it from the book balance

Question 4

Which of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Accepted Answer

A) A check is prepared for a fixed amount;when the check is cashed,the money is entrusted to a petty cash custodian. 
B) A journal entry is recorded to establish the fund and obtain the cash. 
C) When appropriate documentation is presented,cash payments are made from the fund;the petty cash custodian retains the documentation. 
D) When the petty cash fund is replenished,a journal entry is recorded to recognize an increase in the petty cash account. 
A) A check is prepared for a fixed amount;when the check is cashed,the money is entrusted to a petty cash custodian. 
B) A journal entry is recorded to establish the fund and obtain the cash. 
C) When appropriate documentation is presented,cash payments are made from the fund;the petty cash custodian retains the documentation. 
D) When the petty cash fund is replenished,a journal entry is recorded to recognize an increase in the petty cash account.

Question 5

Cash equivalents are investments that are readily convertible to a known amount of cash,where readily means six months or less.

Accepted Answer

A) True 
 B)False

Question 6

If a company records a $310 receipt as $130,this type of error is called a(n)__________.

Accepted Answer

The answer of If a company records a $310 receipt...

Question 7

Which of the following is not a generally recognized internal control procedure?

Accepted Answer

A) Internal review by the audit committee of the board of directors 
B) Independent verification of the work of one employee by another employee 
C) Independent review and appraisal by internal auditors 
D) Segregation of duties 
A) Internal review by the audit committee of the board of directors 
B) Independent verification of the work of one employee by another employee 
C) Independent review and appraisal by internal auditors 
D) Segregation of duties

Question 8

Administrative controls are

Accepted Answer

A) concerned with efficient operations and adherence to managerial policies. 
B) concerned with the reliability of the financial statements. 
C) the responsibility of the company's auditors. 
D) concerned primarily with safeguarding assets. 
A) concerned with efficient operations and adherence to managerial policies. 
B) concerned with the reliability of the financial statements. 
C) the responsibility of the company's auditors. 
D) concerned primarily with safeguarding assets.

Question 9

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

Accepted Answer

A) Segregation of duties 
B) Safeguarding assets and records 
C) Independent verification 
D) Proper authorizations 
A) Segregation of duties 
B) Safeguarding assets and records 
C) Independent verification 
D) Proper authorizations

Question 10

Which of the following is not considered to be a cash equivalent?

Accepted Answer

A) Corporate commercial paper due in 90 days after purchase 
B) U.S.Treasury bills with an original maturity of six months 
C) A money market account with a stock brokerage firm 
D) A certificate of deposit with a term of 75 days when acquired 
A) Corporate commercial paper due in 90 days after purchase 
B) U.S.Treasury bills with an original maturity of six months 
C) A money market account with a stock brokerage firm 
D) A certificate of deposit with a term of 75 days when acquired

Question 11

Deductions on a bank statement for items such as NSF checks and bank service charges are called __________.

Accepted Answer

The answer of Deductions on a bank statement for items...

Question 12

At the time a petty cash fund is replenished,an adjustment must be made to record its replenishment and to recognize the various expenses incurred.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true?

Accepted Answer

A) Good cash management practices dictate that a company should maintain as large a balance as possible in its Cash account. 
B) Sound internal control practice dictates that all cash payments should be made by check. 
C) The person handling the cash should also prepare the bank reconciliation. 
D) Petty cash can be substituted for a checking account to expedite the payment of all disbursements. 
A) Good cash management practices dictate that a company should maintain as large a balance as possible in its Cash account. 
B) Sound internal control practice dictates that all cash payments should be made by check. 
C) The person handling the cash should also prepare the bank reconciliation. 
D) Petty cash can be substituted for a checking account to expedite the payment of all disbursements.

Question 14

Dinho Corporation identified the following data when preparing its April bank reconciliation: $$\begin{array} { l r } 
\text { Bank statement balance } & \$ 45,000 \
\text { Dinho's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 4,500 \
\text { NSF checks } & 1,400 \
\text { Service charge } & 300 \
\text { Deposits in transit } & 5,000 \
\text { Interest earned on checking account } & 25
\end{array}$$
-In addition,Dinho incorrectly recorded a deposit in its books in the amount of $1,000.The correct amount was recorded by the bank as $1,200.
What is the adjusted cash balance at the end of April?

Accepted Answer

A) $44,300 
B) $45,500 
C) $45,000 
D) $45,700 
A) $44,300 
B) $45,500 
C) $45,000 
D) $45,700

Question 15

The group within an organization that is responsible for monitoring and evaluating the internal control system is called the

Accepted Answer

A) audit committee. 
B) internal audit staff. 
C) board of directors. 
D) accounting staff. 
A) audit committee. 
B) internal audit staff. 
C) board of directors. 
D) accounting staff.

Question 16

__________ describes a form used by the accountant to reconcile or resolve any differences between the balance shown on the bank statement for a particular account with the balance shown in the accounting records.

Accepted Answer

The answer of __________ describes a form used by the...

Question 17

Which of the following documents is used in the control of cash receipts?

Accepted Answer

A) Purchase requisitions 
B) Receiving reports 
C) Canceled checks from customers 
D) Bank deposit slips 
A) Purchase requisitions 
B) Receiving reports 
C) Canceled checks from customers 
D) Bank deposit slips

Question 18

Additions on a bank statement for such items as interest paid on the account and notes collected by the bank for the customer are called __________.

Accepted Answer

The answer of Additions on a bank statement for such...

Question 19

As part of good internal control,disbursements can be made either by check or cash.

Accepted Answer

A) True 
 B)False

Question 20

The set of items below was identified in preparing a bank reconciliation for Mars Corp.as of August 31,2017. ?
$$\begin{array} { l r } 
\text { Bank statement balance } & \$ 19,500 \
\text { Mars's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 2,700 \
\text { Customer's NSF check } & 350 \
\text { Service charges } & 100 \
\text { Deposit in transit } & 1,000 \
\text { Interest earned on checking account } & 60
\end{array}$$ Mars Corp.'s balance per books before the reconciliation is

Accepted Answer

A) $17,410. 
B) $17,900. 
C) $18,190. 
D) $18,310. 
A) $17,410. 
B) $17,900. 
C) $18,190. 
D) $18,310.

Segregation and rotation of duties is most effective in

Which of the following statements is true?

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Which of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Cash equivalents are investments that are readily convertible to a known amount of cash,where readily means six months or less.

If a company records a $310 receipt as $130,this type of error is called a(n)__________.

Which of the following is not a generally recognized internal control procedure?

Administrative controls are

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

Which of the following is not considered to be a cash equivalent?

Deductions on a bank statement for items such as NSF checks and bank service charges are called __________.

At the time a petty cash fund is replenished,an adjustment must be made to record its replenishment and to recognize the various expenses incurred.

Which of the following statements is true?

The group within an organization that is responsible for monitoring and evaluating the internal control system is called the

__________ describes a form used by the accountant to reconcile or resolve any differences between the balance shown on the bank statement for a particular account with the balance shown in the accounting records.

Which of the following documents is used in the control of cash receipts?

Additions on a bank statement for such items as interest paid on the account and notes collected by the bank for the customer are called __________.

As part of good internal control,disbursements can be made either by check or cash.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 6: Cash and Internal Control

Segregation and rotation of duties is most effective in

Which of the following statements is true?

A credit memorandum appeared on Central Company's bank statement.How will Central treat this amount on its bank reconciliation?

Which of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Cash equivalents are investments that are readily convertible to a known amount of cash,where readily means six months or less.

If a company records a $310 receipt as $130,this type of error is called a(n)__________.

Which of the following is not a generally recognized internal control procedure?

Administrative controls are

Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?

Which of the following is not considered to be a cash equivalent?

Deductions on a bank statement for items such as NSF checks and bank service charges are called __________.

At the time a petty cash fund is replenished,an adjustment must be made to record its replenishment and to recognize the various expenses incurred.

Which of the following statements is true?

The group within an organization that is responsible for monitoring and evaluating the internal control system is called the

__________ describes a form used by the accountant to reconcile or resolve any differences between the balance shown on the bank statement for a particular account with the balance shown in the accounting records.

Which of the following documents is used in the control of cash receipts?

Additions on a bank statement for such items as interest paid on the account and notes collected by the bank for the customer are called __________.

As part of good internal control,disbursements can be made either by check or cash.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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