Question 1

Internal control involves,in part,the protection of a company's assets.

Accepted Answer

A) True 
 B)False

Question 2

Privately owned companies

Accepted Answer

A) are required to have an independent CPA audit their financial statements. 
B) are required to have their internal control systems audited. 
C) are required to have both the financial statements and internal control systems audited. 
D) are not required to do any of these. 
A) are required to have an independent CPA audit their financial statements. 
B) are required to have their internal control systems audited. 
C) are required to have both the financial statements and internal control systems audited. 
D) are not required to do any of these.

Question 3

The management of public companies must establish systems that

Accepted Answer

A) safeguard the firm's assets. 
B) ensure reliability of its accounting records. 
C) see that employees comply with legal requirements 
D) do all of these. 
A) safeguard the firm's assets. 
B) ensure reliability of its accounting records. 
C) see that employees comply with legal requirements 
D) do all of these.

Question 4

A $150 petty cash fund has cash of $64 and valid receipts for $75.The entry to replenish the fund would be:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 5

At the end of each day,the cashier should be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

Accepted Answer

A) True 
 B)False

Question 6

The petty cash voucher should be kept by the person being reimbursed.

Accepted Answer

A) True 
 B)False

Question 7

The Sarbanes-Oxley Act of 2002 requires management to acknowledge its responsibility for internal control

Accepted Answer

A) in the company's annual report. 
B) in a public statement posted on social media. 
C) in a posted notice at the front of company headquarters. 
D) in all of these. 
A) in the company's annual report. 
B) in a public statement posted on social media. 
C) in a posted notice at the front of company headquarters. 
D) in all of these.

Question 8

Which of the following would be added to the balance per books on a bank reconciliation?

Accepted Answer

A) Notes collected by the bank 
B) Deposits in transit 
C) Service charges 
D) Outstanding checks 
A) Notes collected by the bank 
B) Deposits in transit 
C) Service charges 
D) Outstanding checks

Question 9

Invoices are documents prepared by a vendor and sent to the accounting department of its customers.

Accepted Answer

A) True 
 B)False

Question 10

The Sarbanes-Oxley Act of 2002 does not apply to

Accepted Answer

A) public companies with assets over $300 million. 
B) public companies with assets under $1 million. 
C) privately owned companies. 
D) companies established after 2002. 
A) public companies with assets over $300 million. 
B) public companies with assets under $1 million. 
C) privately owned companies. 
D) companies established after 2002.

Question 11

Under an effective system of internal control,errors occur only as a result of fraud or dishonesty.

Accepted Answer

A) True 
 B)False

Question 12

It is unlikely that a company would want to bond its employees who handle cash or inventory.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Which of the following bank reconciliation items would result in a journal entry?

Accepted Answer

A) Checks outstanding 
B) An adjustment for a check recorded for the wrong amount 
C) Deposits in transit 
D) A bank error on the bank statement 
A) Checks outstanding 
B) An adjustment for a check recorded for the wrong amount 
C) Deposits in transit 
D) A bank error on the bank statement

Question 15

A check authorization would be prepared after a receiving report.

Accepted Answer

A) True 
 B)False

Question 16

Conan Company has the following bank items:   The adjusted bank balance should be

Accepted Answer

A) $25,000 
B) $25,025 
C) $25,400 
D) $25,425 
A) $25,000 
B) $25,025 
C) $25,400 
D) $25,425

Question 17

Cash equivalents are usually listed as short-term investments on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 18

The amount in the petty cash fund plus the sum of the petty cash vouchers should at all times equal the amount shown in the Petty Cash account.

Accepted Answer

A) True 
 B)False

Question 19

Under the perpetual inventory system,inventory losses can be identified more easily than under the periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 20

The use of electronic funds transfers makes check writing unnecessary.

Accepted Answer

A) True 
 B)False

Exam 8: Cash and Internal Control

Internal control involves,in part,the protection of a company's assets.

Privately owned companies

The management of public companies must establish systems that

A $150 petty cash fund has cash of $64 and valid receipts for $75.The entry to replenish the fund would be:

At the end of each day,the cashier should be the one responsible for comparing the amount on the cash register tape with the day's cash additions to the cash register.

The petty cash voucher should be kept by the person being reimbursed.

The Sarbanes-Oxley Act of 2002 requires management to acknowledge its responsibility for internal control

Which of the following would be added to the balance per books on a bank reconciliation?

Invoices are documents prepared by a vendor and sent to the accounting department of its customers.

The Sarbanes-Oxley Act of 2002 does not apply to

Under an effective system of internal control,errors occur only as a result of fraud or dishonesty.

It is unlikely that a company would want to bond its employees who handle cash or inventory.

The petty cash fund should be replenished

Which of the following bank reconciliation items would result in a journal entry?

A check authorization would be prepared after a receiving report.

Conan Company has the following bank items: The adjusted bank balance should be

Cash equivalents are usually listed as short-term investments on the balance sheet.

The amount in the petty cash fund plus the sum of the petty cash vouchers should at all times equal the amount shown in the Petty Cash account.

Under the perpetual inventory system,inventory losses can be identified more easily than under the periodic inventory system.

The use of electronic funds transfers makes check writing unnecessary.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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