Question 1

Three key duties that must always be separated under a good system of internal controls are:

Accepted Answer

A) asset handling,record keeping and transaction approval. 
B) asset handling,hiring and safeguarding of assets. 
C) asset handling,recordkeeping and safeguarding of assets. 
D) record keeping,transaction analysis and transaction approval. 
A) asset handling,record keeping and transaction approval. 
B) asset handling,hiring and safeguarding of assets. 
C) asset handling,recordkeeping and safeguarding of assets. 
D) record keeping,transaction analysis and transaction approval.

Question 2

To further prevent the theft of cash,many companies accept electronic funds transfers from their
customers.

Accepted Answer

A) True 
 B)False

Question 3

Once the company receives newly purchased inventory,it prepares a(n)________ to list the goods received.

Accepted Answer

A) invoice 
B) purchase approval form 
C) receiving report 
D) EFT transfer 
A) invoice 
B) purchase approval form 
C) receiving report 
D) EFT transfer

Question 4

The owner of Samuelson Inc.has reason to believe that an employee has been stealing cash from the company.The employee receives cash from clients,makes the bank deposit,and also prepares the monthly bank reconciliation.To check up on the employee,the owner prepares the following bank reconciliation:
   1.Does it appear the employee has stolen from the company? If so,how much? Explain your answer.
2.Which side of the bank reconciliation shows the company's TRUE cash balance?

Accepted Answer

1.Yes,it appears the employee has stolen

Question 5

List the five internal control procedures.

Accepted Answer

Smart hiring and separation of

Question 6

Which law or regulation requires that public companies must maintain strong internal control systems?

Accepted Answer

A) Dodd-Frank Act 
B) Securities and Exchange Act of 1933 
C) Internal Control Act 
D) Sarbanes-Oxley Act 
A) Dodd-Frank Act 
B) Securities and Exchange Act of 1933 
C) Internal Control Act 
D) Sarbanes-Oxley Act

Question 7

Lori's Company has the following items: cash in a checking account,$7,000;cash in a savings account,$10,000;high-grade government securities due in one month (purchased last month),$3,586;accounts receivable,$3,000.How much should appear as Cash and Cash Equivalents on the balance sheet?

Accepted Answer

A) $10,000 
B) $20,586 
C) $23,586 
D) $23,786 
A) $10,000 
B) $20,586 
C) $23,586 
D) $23,786

Question 8

Which of the following are examples of the misappropriation of assets?

Accepted Answer

A) An employee overstates an expense reimbursement request after a company trip. 
B) an employee theft of inventory 
C) a kickback scheme in the purchasing function 
D) all of the above 
A) An employee overstates an expense reimbursement request after a company trip. 
B) an employee theft of inventory 
C) a kickback scheme in the purchasing function 
D) all of the above

Question 9

Corbin Company was charged $25 for a check printing service fee associated with its checking account.Which journal entry is required?

Accepted Answer

A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required. 
A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required.

Question 10

Differences between the bank statement and the company's Cash account are primarily the result of a time lag in recording transactions.

Accepted Answer

A) True 
 B)False

Question 11

Malware is short for:

Accepted Answer

A) malicious device. 
B) phishing expedition. 
C) malicious software. 
D) phishing software. 
A) malicious device. 
B) phishing expedition. 
C) malicious software. 
D) phishing software.

Question 12

What is the purpose of fraudulent financial reporting?

Accepted Answer

A) Net income and total assets are understated so managers can receive their bonuses. 
B) Net income and total assets are overstated so managers can receive their bonuses. 
C) A company can borrow money that would not otherwise be available. 
D) B and C 
A) Net income and total assets are understated so managers can receive their bonuses. 
B) Net income and total assets are overstated so managers can receive their bonuses. 
C) A company can borrow money that would not otherwise be available. 
D) B and C

Question 13

Outside auditors are responsible for establishing and maintaining adequate internal controls for each company they audit.

Accepted Answer

A) True 
 B)False

Question 14

The following pertains to Carlisle Company:
1.Balance per bank statement,dated March 31,$4,450.
2.Balance of Cash account on company's books at March 31,$4,459.
3.The $1,300 deposit of March 31 was not included in the bank statement.
4.Of the checks recorded as cash disbursements in March,checks totaling $1,050 have not cleared the bank.
5.Service charges for the month,$10.
6.The bank erroneously charged the company's account for a $200 check of another company with a similar name.
7.The bank credited the company's account with the $1,000 proceeds of a noninterest-bearing note that it collected for the company.
8.NSF check of $75 was returned with the bank statement.
9.The bank paid and charged to the company's account a $507 EFT insurance premium for the company.The payment has not been recorded by the company.
10.The bookkeeper recorded a customer's check of $148 as $135.
11.The bank credited the company's account for $20 interest earned.
Prepare the bank reconciliation as of March 31.

Accepted Answer

The answer of The following pertains to Carlisle Company:
1.Balance per...

Question 15

When preparing a bank reconciliation:

Accepted Answer

A) deposits in transit are added to the bank balance. 
B) service charges are subtracted from the bank balance. 
C) outstanding checks are subtracted from the book balance. 
D) book errors are subtracted from the bank balance. 
A) deposits in transit are added to the bank balance. 
B) service charges are subtracted from the bank balance. 
C) outstanding checks are subtracted from the book balance. 
D) book errors are subtracted from the bank balance.

Question 16

One of the most common types of fraud that impacts the financial statements is the misappropriation of assets.

Accepted Answer

A) True 
 B)False

Question 17

A company's petty cash fund:

Accepted Answer

A) cannot be replaced by the use of debit cards. 
B) is kept by two or more employees to ensure that disbursements can readily be made. 
C) is opened with a particular amount of cash. 
D) balance equals the cash left in the petty cash fund minus the total of the paid vouchers in the cash box. 
A) cannot be replaced by the use of debit cards. 
B) is kept by two or more employees to ensure that disbursements can readily be made. 
C) is opened with a particular amount of cash. 
D) balance equals the cash left in the petty cash fund minus the total of the paid vouchers in the cash box.

Question 18

The treasurer conducts the final step for the receipt of cash by mail.This step includes comparing bank deposit amounts from the treasurer and the debit to Cash.

Accepted Answer

A) True 
 B)False

Question 19

Internal control is a plan of organization and system of procedures,implemented by company ________ and the ________,designed to accomplish five objectives.

Accepted Answer

A) internal auditors,employees 
B) external auditors,management 
C) management,board of directors 
D) external auditors,board of directors 
A) internal auditors,employees 
B) external auditors,management 
C) management,board of directors 
D) external auditors,board of directors

Question 20

Internal control procedures do NOT include:

Accepted Answer

A) smart hiring practices. 
B) adequate records. 
C) limited access. 
D) control environment. 
A) smart hiring practices. 
B) adequate records. 
C) limited access. 
D) control environment.

Three key duties that must always be separated under a good system of internal controls are:

To further prevent the theft of cash,many companies accept electronic funds transfers from their customers.

Once the company receives newly purchased inventory,it prepares a(n)________ to list the goods received.

List the five internal control procedures.

Which law or regulation requires that public companies must maintain strong internal control systems?

Lori's Company has the following items: cash in a checking account,$7,000;cash in a savings account,$10,000;high-grade government securities due in one month (purchased last month),$3,586;accounts receivable,$3,000.How much should appear as Cash and Cash Equivalents on the balance sheet?

Which of the following are examples of the misappropriation of assets?

Corbin Company was charged $25 for a check printing service fee associated with its checking account.Which journal entry is required?

Differences between the bank statement and the company's Cash account are primarily the result of a time lag in recording transactions.

Malware is short for:

What is the purpose of fraudulent financial reporting?

Outside auditors are responsible for establishing and maintaining adequate internal controls for each company they audit.

When preparing a bank reconciliation:

One of the most common types of fraud that impacts the financial statements is the misappropriation of assets.

A company's petty cash fund:

The treasurer conducts the final step for the receipt of cash by mail.This step includes comparing bank deposit amounts from the treasurer and the debit to Cash.

Internal control is a plan of organization and system of procedures,implemented by company and the ,designed to accomplish five objectives.

Internal control procedures do NOT include:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 4: Internal Control Cash

Three key duties that must always be separated under a good system of internal controls are:

To further prevent the theft of cash,many companies accept electronic funds transfers from their customers.

Once the company receives newly purchased inventory,it prepares a(n)________ to list the goods received.

List the five internal control procedures.

Which law or regulation requires that public companies must maintain strong internal control systems?

Lori's Company has the following items: cash in a checking account,$7,000;cash in a savings account,$10,000;high-grade government securities due in one month (purchased last month),$3,586;accounts receivable,$3,000.How much should appear as Cash and Cash Equivalents on the balance sheet?

Which of the following are examples of the misappropriation of assets?

Corbin Company was charged $25 for a check printing service fee associated with its checking account.Which journal entry is required?

Differences between the bank statement and the company's Cash account are primarily the result of a time lag in recording transactions.

Malware is short for:

What is the purpose of fraudulent financial reporting?

Outside auditors are responsible for establishing and maintaining adequate internal controls for each company they audit.

When preparing a bank reconciliation:

One of the most common types of fraud that impacts the financial statements is the misappropriation of assets.

A company's petty cash fund:

The treasurer conducts the final step for the receipt of cash by mail.This step includes comparing bank deposit amounts from the treasurer and the debit to Cash.

Internal control is a plan of organization and system of procedures,implemented by company ________ and the ________,designed to accomplish five objectives.

Internal control procedures do NOT include:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Internal control is a plan of organization and system of procedures,implemented by company and the ,designed to accomplish five objectives.