Exam 4: Internal Controls, Accounting for Cash, and Ethics

Which of the item(s) would be added to the company's unadjusted book balance to determine the true cash balance?

Indicate whether each of the following statements regarding internal controls is true or false. -Administrative controls are composed of policies and procedures that are designed to safeguard assets and assure that accounting records contain reliable information

What documentation issued by a bank increases a company's checking account balance at the bank?

Indicate whether each of the following statements about internal control and ethics is true or false. -The importance of ethical conduct is recognized across a broad spectrum of accounting organizations

Indicate whether each of the following statements about cash payments is true or false. -The person who signs a business's checks should make the journal entry to record the payment of cash

The qualified opinion is the most favorable opinion that can be expressed by an independent auditor.

Indicate whether each of the following statements regarding internal control is true or false. -Cash is most susceptible to embezzlement at the points of receipt and disbursement

What internal control procedures should a business adopt with respect to cash payments?

In performing the bank reconciliation for Bounds Company, a company employee found that the bank had collected one of the company's notes receivable in the amount of $2,000 and had deposited this amount in the company's account at the bank. This amount did not include interest.

Indicate whether each of the following statements about internal control and ethics is true or false. -The use of safety deposit boxes is a common feature of an effective internal control system

The following are features of an internal control system except

Indicate whether each of the following statements about internal control and ethics is true or false. -An internal control system consists of policies and procedures that reduce opportunities for fraud

Which of the following statements accurately describes a fidelity bond?

In a bank reconciliation, a customer's NSF check included with the bank statement is:

Indicate whether each of the following statements about separation of duties is true or false. -When a company has achieved an effective separation of duties, collusion among employees would be required to commit theft or fraud and avoid detection

In a company's bank reconciliation, an outstanding check is a check that:

Indicate whether each of the following statements about separation of duties is true or false. -One employee should not be responsible for both making cash sales to customers and recording the transaction in the business's accounting records

Indicate whether each of the following statements regarding internal controls is true or false. -It is against the basic rules of internal control to require employees to take regular vacations

In preparing a bank reconciliation, is an outstanding check an adjustment to the book balance, the bank balance, or neither?

What is a fidelity bond, and what is its purpose?