Question 1

Internal control is weakened by all of the following, except

Accepted Answer

A)  collusion. 
B)  separation of duties. 
C)  human error. 
D)  effects of changing conditions. 
A)  collusion. 
B)  separation of duties. 
C)  human error. 
D)  effects of changing conditions.

Question 2

The petty cash fund should be replenished

Accepted Answer

A)  only for the total amount of expense receipts on hand. 
B)  for the total amount that was originally set up in the imprest fund. 
C)  for the total amount of expense receipts on hand plus cash remaining before replenishment. 
D)  for the amount needed to bring the petty cash fund back to its imprest amount. 
A)  only for the total amount of expense receipts on hand. 
B)  for the total amount that was originally set up in the imprest fund. 
C)  for the total amount of expense receipts on hand plus cash remaining before replenishment. 
D)  for the amount needed to bring the petty cash fund back to its imprest amount.

Question 3

Merchandisers usually take a physical inventory when the volume of goods is at its highest levels.

Accepted Answer

A) True 
 B)False

Question 4

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

Accepted Answer

A) True 
 B)False

Question 5

In the financial statements, the balance of the Petty Cash account and the balance of main cash account are shown separately.

Accepted Answer

A) True 
 B)False

Question 6

When a company makes payment for goods or services, the check is prepared by the company's

Accepted Answer

A)  requesting department. 
B)  treasurer. 
C)  accounting department. 
D)  receiving department. 
A)  requesting department. 
B)  treasurer. 
C)  accounting department. 
D)  receiving department.

Question 7

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would not be found in a good system of internal control?

Accepted Answer

A)  Requiring all employees to take earned vacations 
B)  Establishing a system of checks and balances 
C)  Having one person handle all the responsibilities of a department 
D)  Establishing an internal audit staff 
A)  Requiring all employees to take earned vacations 
B)  Establishing a system of checks and balances 
C)  Having one person handle all the responsibilities of a department 
D)  Establishing an internal audit staff

Question 9

A purchase requisition is a document sent by a company to a vendor.

Accepted Answer

A) True 
 B)False

Question 10

Good internal control dictates that key employees be rotated among different jobs.

Accepted Answer

A) True 
 B)False

Question 11

It is best that the receiving department not be given a copy of the purchase order or the invoice.

Accepted Answer

A) True 
 B)False

Question 12

A remittance advice is attached to a(n)

Accepted Answer

A)  receiving report. 
B)  check. 
C)  purchase order. 
D)  invoice. 
A)  receiving report. 
B)  check. 
C)  purchase order. 
D)  invoice.

Question 13

A company's merchandise inventory should include damaged goods that can be sold at a reduced price.

Accepted Answer

A) True 
 B)False

Question 14

A company's merchandise inventory includes all of the following, except

Accepted Answer

A)  goods in warehouses. 
B)  goods sold, but not yet delivered. 
C)  goods in transit from suppliers, if title has passed to the merchandiser. 
D)  goods in trucks between the warehouse and the store. 
A)  goods in warehouses. 
B)  goods sold, but not yet delivered. 
C)  goods in transit from suppliers, if title has passed to the merchandiser. 
D)  goods in trucks between the warehouse and the store.

Question 15

Taking a physical inventory is not necessary under a perpetual inventory system.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following documents would be prepared (by a buyer of goods) after the others?

Accepted Answer

A)  Purchase order 
B)  Check 
C)  Purchase requisition 
D)  Receiving report 
A)  Purchase order 
B)  Check 
C)  Purchase requisition 
D)  Receiving report

Question 17

Which of the following is not a primary concern of internal control?

Accepted Answer

A)  Fairness of financial statements 
B)  Accuracy of accounting records 
C)  Safeguarding assets 
D)  Efficiency of company operations 
A)  Fairness of financial statements 
B)  Accuracy of accounting records 
C)  Safeguarding assets 
D)  Efficiency of company operations

Exam 7: Internal Control

Internal control is weakened by all of the following, except

The petty cash fund should be replenished

Merchandisers usually take a physical inventory when the volume of goods is at its highest levels.

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

In the financial statements, the balance of the Petty Cash account and the balance of main cash account are shown separately.

When a company makes payment for goods or services, the check is prepared by the company's

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

Which of the following would not be found in a good system of internal control?

A purchase requisition is a document sent by a company to a vendor.

Good internal control dictates that key employees be rotated among different jobs.

It is best that the receiving department not be given a copy of the purchase order or the invoice.

A remittance advice is attached to a(n)

A company's merchandise inventory should include damaged goods that can be sold at a reduced price.

A company's merchandise inventory includes all of the following, except

Taking a physical inventory is not necessary under a perpetual inventory system.

Which of the following documents would be prepared (by a buyer of goods) after the others?

Which of the following is not a primary concern of internal control?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Filters