Question 1

Which internal control procedure is followed when storage areas are secured with limited access?

Accepted Answer

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

Question 2

Which of the following is not a requirement of a company's external auditors under the Sarbanes-Oxley Act?

Accepted Answer

A) They must give an opinion that the company maintained an effective internal control system over financial reporting. 
B) They must design and implement an effective information system design. 
C) They cannot perform any brokerage services for the company. 
D) All of these are requirements of a company's external auditors the Sarbanes-Oxley Act. 
A) They must give an opinion that the company maintained an effective internal control system over financial reporting. 
B) They must design and implement an effective information system design. 
C) They cannot perform any brokerage services for the company. 
D) All of these are requirements of a company's external auditors the Sarbanes-Oxley Act.

Question 3

A good system of internal control is important to make a company's accounting records completely foolproof.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not a procedure in the approval of a specific invoice for payment?

Accepted Answer

A) The purchase requisition,purchase order,receiving report,and invoice are compared. 
B) An accounting department employee must verify the mathematical accuracy of the amounts that appear on the invoice. 
C) The purchasing department prepares a voucher to request payment. 
D) All of these are procedures in the approval of a specific invoice for payment. 
A) The purchase requisition,purchase order,receiving report,and invoice are compared. 
B) An accounting department employee must verify the mathematical accuracy of the amounts that appear on the invoice. 
C) The purchasing department prepares a voucher to request payment. 
D) All of these are procedures in the approval of a specific invoice for payment.

Question 5

Checks presented for payment and paid by the bank are known as

Accepted Answer

A) canceled checks. 
B) certified checks. 
C) NSF checks. 
D) outstanding checks. 
A) canceled checks. 
B) certified checks. 
C) NSF checks. 
D) outstanding checks.

Question 6

When reconciling a bank account,the company does not have to prepare an adjusting entry for outstanding checks.

Accepted Answer

A) True 
 B)False

Question 7

A check that is returned or "bounces" because of insufficient funds is called a(n)__________.

Accepted Answer

The answer of A check that is returned or "bounces"...

Question 8

What are at least four important internal control procedures?

Accepted Answer

Student answers may vary but can include

Question 9

Which of the following items is not included in cash?

Accepted Answer

A) A bank certificate of deposit for one year 
B) A savings account at the bank 
C) A checking account at the bank 
D) All of these are included in cash. 
A) A bank certificate of deposit for one year 
B) A savings account at the bank 
C) A checking account at the bank 
D) All of these are included in cash.

Question 10

Which of the following items would be subtracted from the balance per bank statement on a bank reconciliation?

Accepted Answer

A) Outstanding checks 
B) Deposit in transit 
C) Service charge assessed by the bank 
D) Interest collected by the bank on a customer note 
A) Outstanding checks 
B) Deposit in transit 
C) Service charge assessed by the bank 
D) Interest collected by the bank on a customer note

Question 11

The key to the classification of an amount as cash is that it be available to pay debts within a three-month period of time.

Accepted Answer

A) True 
 B)False

Question 12

Each of the following documents is used in the control of cash disbursements except

Accepted Answer

A) purchase requisitions. 
B) purchase orders. 
C) receiving reports. 
D) cash register tapes. 
A) purchase requisitions. 
B) purchase orders. 
C) receiving reports. 
D) cash register tapes.

Question 13

A(n)__________ is a form that a department uses to initiate a request to order merchandise.

Accepted Answer

purchase r

Question 14

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures.
-All documents attached to an invoice approval form are canceled before a check is signed.

Accepted Answer

A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control 
A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control

Question 15

After it completes a bank reconciliation,a business must prepare a number of adjustments to its records.The additions and deductions from the Cash account on the books should be the basis for the adjustments.

Accepted Answer

A) True 
 B)False

Question 16

Checks returned by a bank because customers did not have sufficient funds in their account are called

Accepted Answer

A) canceled checks. 
B) certified checks. 
C) NSF checks. 
D) outstanding checks. 
A) canceled checks. 
B) certified checks. 
C) NSF checks. 
D) outstanding checks.

Question 17

What is meant by "cash equivalents"?

Accepted Answer

"Cash equivalents" refer to very short-t

Question 18

Allowing only certain employees to order goods and services for the company is an example of what internal control procedure?

Accepted Answer

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

Question 19

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity,identify whether or not the activity adheres to or violates sound internal control procedures.
-The receiving department compares the quantity received with the quantity printed on the receiving report when the purchase order was prepared.

Accepted Answer

A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control 
A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control

Question 20

If a company has internal auditors,it does not need to have external auditors.

Accepted Answer

A) True 
 B)False

Which internal control procedure is followed when storage areas are secured with limited access?

Which of the following is not a requirement of a company's external auditors under the Sarbanes-Oxley Act?

A good system of internal control is important to make a company's accounting records completely foolproof.

Which of the following is not a procedure in the approval of a specific invoice for payment?

Checks presented for payment and paid by the bank are known as

When reconciling a bank account,the company does not have to prepare an adjusting entry for outstanding checks.

A check that is returned or "bounces" because of insufficient funds is called a(n)__________.

What are at least four important internal control procedures?

Which of the following items is not included in cash?

Which of the following items would be subtracted from the balance per bank statement on a bank reconciliation?

The key to the classification of an amount as cash is that it be available to pay debts within a three-month period of time.

Each of the following documents is used in the control of cash disbursements except

A(n)__________ is a form that a department uses to initiate a request to order merchandise.

After it completes a bank reconciliation,a business must prepare a number of adjustments to its records.The additions and deductions from the Cash account on the books should be the basis for the adjustments.

Checks returned by a bank because customers did not have sufficient funds in their account are called

What is meant by "cash equivalents"?

Allowing only certain employees to order goods and services for the company is an example of what internal control procedure?

If a company has internal auditors,it does not need to have external auditors.

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

Which internal control procedure is followed when storage areas are secured with limited access?

Which of the following is not a requirement of a company's external auditors under the Sarbanes-Oxley Act?

A good system of internal control is important to make a company's accounting records completely foolproof.

Which of the following is not a procedure in the approval of a specific invoice for payment?

Checks presented for payment and paid by the bank are known as

When reconciling a bank account,the company does not have to prepare an adjusting entry for outstanding checks.

A check that is returned or "bounces" because of insufficient funds is called a(n)__________.

What are at least four important internal control procedures?

Which of the following items is not included in cash?

Which of the following items would be subtracted from the balance per bank statement on a bank reconciliation?

The key to the classification of an amount as cash is that it be available to pay debts within a three-month period of time.

Each of the following documents is used in the control of cash disbursements except

A(n)__________ is a form that a department uses to initiate a request to order merchandise.

After it completes a bank reconciliation,a business must prepare a number of adjustments to its records.The additions and deductions from the Cash account on the books should be the basis for the adjustments.

Checks returned by a bank because customers did not have sufficient funds in their account are called

What is meant by "cash equivalents"?

Allowing only certain employees to order goods and services for the company is an example of what internal control procedure?

If a company has internal auditors,it does not need to have external auditors.

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

Filters