Question 1

Which of the following statements regarding fraud is INCORRECT?

Accepted Answer

A) Fraud violates the rights of many for the temporary betterment of a few and for the ultimate betterment of no one. 
B) Motive,opportunity,and rationalization are elements that make up virtually every fraud. 
C) The perpetrators of fraud usually do so for their own short-term economic gain. 
D) Misappropriation of assets is a type of fraud that is committed by company managers who make false and misleading entries in the books in order to improve a company's financial results. 
A) Fraud violates the rights of many for the temporary betterment of a few and for the ultimate betterment of no one. 
B) Motive,opportunity,and rationalization are elements that make up virtually every fraud. 
C) The perpetrators of fraud usually do so for their own short-term economic gain. 
D) Misappropriation of assets is a type of fraud that is committed by company managers who make false and misleading entries in the books in order to improve a company's financial results.

Question 2

Deposits that have been recorded on the company's books,but have not yet been recorded by the bank are:

Accepted Answer

A) nonsufficient funds deposits. 
B) outstanding deposits. 
C) deposits in transit. 
D) electronic funds deposits. 
A) nonsufficient funds deposits. 
B) outstanding deposits. 
C) deposits in transit. 
D) electronic funds deposits.

Question 3

A weak control environment might allow top management to have the opportunity to commit fraud.

Accepted Answer

A) True 
 B)False

Question 4

All of the following will appear on the book side of the bank reconciliation EXCEPT for:

Accepted Answer

A) service charges. 
B) electronic funds transfers. 
C) deposits in transit. 
D) book errors. 
A) service charges. 
B) electronic funds transfers. 
C) deposits in transit. 
D) book errors.

Question 5

All items on the bank side of the bank reconciliation need to be recorded in the company's books.

Accepted Answer

A) True 
 B)False

Question 6

When companies use debit cards for purchases of relatively small amounts:

Accepted Answer

A) employees who need to make the purchases must turn in receipts for purchases. 
B) supervisors do not require receipts for the small purchases because prior approval was given. 
C) must use a imprest system 
D) the employee who used the debit card compares the receipts to the EFT amounts on the bank statement. 
A) employees who need to make the purchases must turn in receipts for purchases. 
B) supervisors do not require receipts for the small purchases because prior approval was given. 
C) must use a imprest system 
D) the employee who used the debit card compares the receipts to the EFT amounts on the bank statement.

Question 7

The duties of purchasing goods and receiving the goods should be given to the same employee.

Accepted Answer

A) True 
 B)False

Question 8

Accounts payable would be an example of a cash equivalent.

Accepted Answer

A) True 
 B)False

Question 9

With regard to customer checks received by mail,which statement is TRUE?

Accepted Answer

A) The debit to Cash by the accounting department should equal the amount deposited in the bank by the mailroom employee. 
B) The customers' Accounts Receivable accounts should be adjusted by the cashier in the treasury department for the payments received. 
C) The controller compares the customers' checks to the remittance advices sent from the mailroom. 
D) The accounting department debits Cash and credits Accounts Receivable.The cashier in the treasurer's department deposits the checks in the bank. 
A) The debit to Cash by the accounting department should equal the amount deposited in the bank by the mailroom employee. 
B) The customers' Accounts Receivable accounts should be adjusted by the cashier in the treasury department for the payments received. 
C) The controller compares the customers' checks to the remittance advices sent from the mailroom. 
D) The accounting department debits Cash and credits Accounts Receivable.The cashier in the treasurer's department deposits the checks in the bank.

Question 10

Which of the following items can be added to or subtracted from the bank balance when preparing the bank reconciliation?

Accepted Answer

A) book errors 
B) bank errors 
C) EFT payments by bank 
D) EFT receipts by bank 
A) book errors 
B) bank errors 
C) EFT payments by bank 
D) EFT receipts by bank

Question 11

Which of the following is a CORRECT statement regarding the bank reconciliation?

Accepted Answer

A) The bank reconciliation is part of the general ledger. 
B) Journal entries need to be made for all transactions on the bank side to get the accounts up-to-date. 
C) Journal entries need to be made for all transactions on the book side to get the accounts up-to-date. 
D) The bank reconciliation is part of the journal. 
A) The bank reconciliation is part of the general ledger. 
B) Journal entries need to be made for all transactions on the bank side to get the accounts up-to-date. 
C) Journal entries need to be made for all transactions on the book side to get the accounts up-to-date. 
D) The bank reconciliation is part of the journal.

Question 12

For good internal control:

Accepted Answer

A) the purchasing agent should also receive the goods. 
B) the purchasing agent should also approve the invoice for payment. 
C) the purchasing agent should not receive the goods or approve the invoice for payment. 
D) the purchasing agent should prepare an EFT for payment. 
A) the purchasing agent should also receive the goods. 
B) the purchasing agent should also approve the invoice for payment. 
C) the purchasing agent should not receive the goods or approve the invoice for payment. 
D) the purchasing agent should prepare an EFT for payment.

Question 13

The treasurer is solely responsible for the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 14

Collusion is the method used to defeat an internal controls system.

Accepted Answer

A) True 
 B)False

Question 15

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

Accepted Answer

A) True 
 B)False

Question 16

The type of fraud committed by employees of an entity,who steal money from the company and cover it up through erroneous entries in the books,is called:

Accepted Answer

A) misappropriation of assets. 
B) fraudulent financial reporting. 
C) phishing. 
D) collusion. 
A) misappropriation of assets. 
B) fraudulent financial reporting. 
C) phishing. 
D) collusion.

Question 17

Payment by check is an important internal control because:

Accepted Answer

A) the check provides a record of the payment. 
B) the check must be signed by an authorized official who should study the evidence supporting the payment. 
C) all checks must be approved by the bank's internal audit department before they are paid. 
D) A and B 
A) the check provides a record of the payment. 
B) the check must be signed by an authorized official who should study the evidence supporting the payment. 
C) all checks must be approved by the bank's internal audit department before they are paid. 
D) A and B

Question 18

Internal controls:

Accepted Answer

A) can never be beat. 
B) can be circumvented. 
C) are not subject to collusion. 
D) are never affected by fatigue and negligence. 
A) can never be beat. 
B) can be circumvented. 
C) are not subject to collusion. 
D) are never affected by fatigue and negligence.

Question 19

Which statement is FALSE?

Accepted Answer

A) Sales to customers should be approved by a separate credit department. 
B) Purchases on credit should be approved by a separate purchasing department. 
C) Transactions with a large dollar amount should be approved by the Board of Directors or top management. 
D) The firing of employees should be handled by the department where the employee works. 
A) Sales to customers should be approved by a separate credit department. 
B) Purchases on credit should be approved by a separate purchasing department. 
C) Transactions with a large dollar amount should be approved by the Board of Directors or top management. 
D) The firing of employees should be handled by the department where the employee works.

Question 20

Which is NOT an objective of an internal control system?

Accepted Answer

A) safeguarding of assets 
B) compliance with company policies 
C) compliance with legal requirements 
D) risk assessment 
A) safeguarding of assets 
B) compliance with company policies 
C) compliance with legal requirements 
D) risk assessment

Which of the following statements regarding fraud is INCORRECT?

Deposits that have been recorded on the company's books,but have not yet been recorded by the bank are:

A weak control environment might allow top management to have the opportunity to commit fraud.

All of the following will appear on the book side of the bank reconciliation EXCEPT for:

All items on the bank side of the bank reconciliation need to be recorded in the company's books.

When companies use debit cards for purchases of relatively small amounts:

The duties of purchasing goods and receiving the goods should be given to the same employee.

Accounts payable would be an example of a cash equivalent.

With regard to customer checks received by mail,which statement is TRUE?

Which of the following items can be added to or subtracted from the bank balance when preparing the bank reconciliation?

Which of the following is a CORRECT statement regarding the bank reconciliation?

For good internal control:

The treasurer is solely responsible for the petty cash fund.

Collusion is the method used to defeat an internal controls system.

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

The type of fraud committed by employees of an entity,who steal money from the company and cover it up through erroneous entries in the books,is called:

Payment by check is an important internal control because:

Internal controls:

Which statement is FALSE?

Which is NOT an objective of an internal control system?

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

Which of the following statements regarding fraud is INCORRECT?

Deposits that have been recorded on the company's books,but have not yet been recorded by the bank are:

A weak control environment might allow top management to have the opportunity to commit fraud.

All of the following will appear on the book side of the bank reconciliation EXCEPT for:

All items on the bank side of the bank reconciliation need to be recorded in the company's books.

When companies use debit cards for purchases of relatively small amounts:

The duties of purchasing goods and receiving the goods should be given to the same employee.

Accounts payable would be an example of a cash equivalent.

With regard to customer checks received by mail,which statement is TRUE?

Which of the following items can be added to or subtracted from the bank balance when preparing the bank reconciliation?

Which of the following is a CORRECT statement regarding the bank reconciliation?

For good internal control:

The treasurer is solely responsible for the petty cash fund.

Collusion is the method used to defeat an internal controls system.

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

The type of fraud committed by employees of an entity,who steal money from the company and cover it up through erroneous entries in the books,is called:

Payment by check is an important internal control because:

Internal controls:

Which statement is FALSE?

Which is NOT an objective of an internal control system?

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