Question 1

Which of the following is not a feature of an internal control system?

Accepted Answer

A)  Separation of duties so that fraud or theft requires collusion 
B)  Establishing clear lines of authority and responsibility 
C)  Using unnumbered receipts and purchase orders 
D)  Implementing physical controls such as locking cash in a safe 
A)  Separation of duties so that fraud or theft requires collusion 
B)  Establishing clear lines of authority and responsibility 
C)  Using unnumbered receipts and purchase orders 
D)  Implementing physical controls such as locking cash in a safe

Question 2

Indicate whether each of the following statements about a bank statement is true or false.
-A qualified opinion means that the financial statements are in compliance with GAAP, but the auditors have reservations about something in the financial statements

Accepted Answer

A) True 
 B)False

Question 3

Indicate whether each of the following statements about a bank statement is true or false.
-The bank statement is prepared from the bank customer's point of view

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements concerning internal controls is true?

Accepted Answer

A)  Internal administrative controls are designed to limit the amount of funds spent on investments. 
B)  The control procedure, separation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company. 
C)  Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. 
D)  A strong internal control system provides reasonable assurance that the objectives of a company will be accomplished. 
A)  Internal administrative controls are designed to limit the amount of funds spent on investments. 
B)  The control procedure, separation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company. 
C)  Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. 
D)  A strong internal control system provides reasonable assurance that the objectives of a company will be accomplished.

Question 5

An effective system of internal control is designed to detect the following except for:

Accepted Answer

A)  collusion 
B)  fraud 
C)  theft 
D)  irregularities 
A)  collusion 
B)  fraud 
C)  theft 
D)  irregularities

Question 6

At June 30, 2014, the bank reconciliation of Swale Company reveals deposits in transit of $2,000.

Accepted Answer

The answer of At June 30, 2014, the bank reconciliation...

Question 7

Link's entry to record the NSF check will

Accepted Answer

A)  increase the Accounts Receivable account. 
B)  decrease the Cash account. 
C)  not affect the total amount of assets. 
D)  all of these. 
A)  increase the Accounts Receivable account. 
B)  decrease the Cash account. 
C)  not affect the total amount of assets. 
D)  all of these.

Question 8

Indicate whether each of the following statements about separation of duties is true or false.
-Having a clear separation of duties will reduce employees' temptation to commit theft or fraud

Accepted Answer

A) True 
 B)False

Question 9

Indicate whether each of the following statements about cash payments is true or false.
-Reviewing supporting documents before signing a check can prevent employee theft and also reveal errors that employees may have made

Accepted Answer

A) True 
 B)False

Question 10

Indicate whether each of the following statements regarding internal controls is true or false.
-All spoiled and voided checks should be defaced and retained

Accepted Answer

A) True 
 B)False

Question 11

Indicate whether each of the following statements about a bank statement is true or false.
-The confidentiality rules of the AICPA's code of ethics for CPAs do not prohibit auditors from testifying in a court of law

Accepted Answer

A) True 
 B)False

Question 12

Indicate whether each of the following statements about cash payments is true or false.
-A spoiled check should be marked void and then discarded or shredded

Accepted Answer

A) True 
 B)False

Question 13

Indicate whether each of the following statements is true or false.
-Outstanding checks do not appear on the bank statement

Accepted Answer

A) True 
 B)False

Question 14

When a customer's NSF check is returned to a business, the business should record an uncollectible account loss.

Accepted Answer

A) True 
 B)False

Question 15

At June 30, 2014, the bank reconciliation of Stein Company reveals outstanding checks of $820.

Accepted Answer

The answer of At June 30, 2014, the bank reconciliation...

Question 16

Krieger Company's bank statement included an NSF check written by one of its customers. What effect will the entry to recognize the NSF check have on the company's financial statements?

Accepted Answer

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

Question 17

The most negative opinion that an auditor can express is the

Accepted Answer

A)  Unqualified opinion 
B)  Qualified opinion 
C)  Adverse opinion 
D)  Disclaimer 
A)  Unqualified opinion 
B)  Qualified opinion 
C)  Adverse opinion 
D)  Disclaimer

Question 18

Indicate whether each of the following statements about separation of duties is true or false.
-When a business achieves a clear separation of duties, the work of one employee acts as a check on the work of other employees

Accepted Answer

A) True 
 B)False

Question 19

A financial statement audit is

Accepted Answer

A)  a detailed examination of a company's financial statements 
B)  tests the reliability of the accounting system used to produce the financial statements 
C)  conducted by an independent auditor 
D)  all of the above 
A)  a detailed examination of a company's financial statements 
B)  tests the reliability of the accounting system used to produce the financial statements 
C)  conducted by an independent auditor 
D)  all of the above

Question 20

Wren Company accepted a check from Jay Company as payment for services rendered. Wren's bank statement revealed that the Jay check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Wren Company?

Accepted Answer

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

Which of the following is not a feature of an internal control system?

Indicate whether each of the following statements about a bank statement is true or false. -A qualified opinion means that the financial statements are in compliance with GAAP, but the auditors have reservations about something in the financial statements

Indicate whether each of the following statements about a bank statement is true or false. -The bank statement is prepared from the bank customer's point of view

Which of the following statements concerning internal controls is true?

An effective system of internal control is designed to detect the following except for:

At June 30, 2014, the bank reconciliation of Swale Company reveals deposits in transit of $2,000.

Link's entry to record the NSF check will

Indicate whether each of the following statements about separation of duties is true or false. -Having a clear separation of duties will reduce employees' temptation to commit theft or fraud

Indicate whether each of the following statements about cash payments is true or false. -Reviewing supporting documents before signing a check can prevent employee theft and also reveal errors that employees may have made

Indicate whether each of the following statements regarding internal controls is true or false. -All spoiled and voided checks should be defaced and retained

Indicate whether each of the following statements about a bank statement is true or false. -The confidentiality rules of the AICPA's code of ethics for CPAs do not prohibit auditors from testifying in a court of law

Indicate whether each of the following statements about cash payments is true or false. -A spoiled check should be marked void and then discarded or shredded

Indicate whether each of the following statements is true or false. -Outstanding checks do not appear on the bank statement

When a customer's NSF check is returned to a business, the business should record an uncollectible account loss.

At June 30, 2014, the bank reconciliation of Stein Company reveals outstanding checks of $820.

Krieger Company's bank statement included an NSF check written by one of its customers. What effect will the entry to recognize the NSF check have on the company's financial statements?

The most negative opinion that an auditor can express is the

Indicate whether each of the following statements about separation of duties is true or false. -When a business achieves a clear separation of duties, the work of one employee acts as a check on the work of other employees

A financial statement audit is

Wren Company accepted a check from Jay Company as payment for services rendered. Wren's bank statement revealed that the Jay check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Wren Company?

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

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

Which of the following is not a feature of an internal control system?

Indicate whether each of the following statements about a bank statement is true or false. -A qualified opinion means that the financial statements are in compliance with GAAP, but the auditors have reservations about something in the financial statements

Indicate whether each of the following statements about a bank statement is true or false. -The bank statement is prepared from the bank customer's point of view

Which of the following statements concerning internal controls is true?

An effective system of internal control is designed to detect the following except for:

At June 30, 2014, the bank reconciliation of Swale Company reveals deposits in transit of $2,000.

Link's entry to record the NSF check will

Indicate whether each of the following statements about separation of duties is true or false. -Having a clear separation of duties will reduce employees' temptation to commit theft or fraud

Indicate whether each of the following statements about cash payments is true or false. -Reviewing supporting documents before signing a check can prevent employee theft and also reveal errors that employees may have made

Indicate whether each of the following statements regarding internal controls is true or false. -All spoiled and voided checks should be defaced and retained

Indicate whether each of the following statements about a bank statement is true or false. -The confidentiality rules of the AICPA's code of ethics for CPAs do not prohibit auditors from testifying in a court of law

Indicate whether each of the following statements about cash payments is true or false. -A spoiled check should be marked void and then discarded or shredded

Indicate whether each of the following statements is true or false. -Outstanding checks do not appear on the bank statement

When a customer's NSF check is returned to a business, the business should record an uncollectible account loss.

At June 30, 2014, the bank reconciliation of Stein Company reveals outstanding checks of $820.

Krieger Company's bank statement included an NSF check written by one of its customers. What effect will the entry to recognize the NSF check have on the company's financial statements?

The most negative opinion that an auditor can express is the

Indicate whether each of the following statements about separation of duties is true or false. -When a business achieves a clear separation of duties, the work of one employee acts as a check on the work of other employees

A financial statement audit is

Wren Company accepted a check from Jay Company as payment for services rendered. Wren's bank statement revealed that the Jay check was an NSF check. What effect will the entry to record the NSF check have on the accounting equation of Wren Company?

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters