Question 1

What is a financial statement audit?

Accepted Answer

It is a detailed examination of a compan

Question 2

Independent auditors are

Accepted Answer

A)  responsible for discovering fraud 
B)  responsible for providing reasonable assurance that financial statements are free of misstatements 
C)  responsible for providing absolute assurance that financial statements are free of errors 
D)  none of the above 
A)  responsible for discovering fraud 
B)  responsible for providing reasonable assurance that financial statements are free of misstatements 
C)  responsible for providing absolute assurance that financial statements are free of errors 
D)  none of the above

Question 3

Which of the following situations provides the most likely indication that fraud exists?

Accepted Answer

A)  Exelon Corporation's earnings per share this quarter is 10% higher than last quarter. 
B)  Quantum Corporation's sales this year is 20% higher than last year's sales. 
C)  Papillon Product Inc.'s profits have increased each for the last 5 years,but its cash reserves have decreased steadily in the same time period. 
D)  Bobadilla Bookstores opened 10 new stores during the most recent quarter. 
A)  Exelon Corporation's earnings per share this quarter is 10% higher than last quarter. 
B)  Quantum Corporation's sales this year is 20% higher than last year's sales. 
C)  Papillon Product Inc.'s profits have increased each for the last 5 years,but its cash reserves have decreased steadily in the same time period. 
D)  Bobadilla Bookstores opened 10 new stores during the most recent quarter.

Question 4

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Accepted Answer

A)  subtracted from the unadjusted book balance. 
B)  added to the unadjusted bank balance. 
C)  subtracted from the unadjusted bank balance. 
D)  added to the unadjusted book balance. 
A)  subtracted from the unadjusted book balance. 
B)  added to the unadjusted bank balance. 
C)  subtracted from the unadjusted bank balance. 
D)  added to the unadjusted book balance.

Question 5

Effective internal controls for cash include:

Accepted Answer

A)  making cash payments by prenumbered check. 
B)  depositing cash in the bank on a timely basis. 
C)  giving written cash receipts to customers as evidence of payment. 
D)  all of these. 
A)  making cash payments by prenumbered check. 
B)  depositing cash in the bank on a timely basis. 
C)  giving written cash receipts to customers as evidence of payment. 
D)  all of these.

Question 6

The most favorable 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 7

Hyperion Company has established internal control policies and procedures in order to achieve the following objectives: (1)Safeguard the company's assets
(2)Assure that the accounting records contain reliable information
(3)Evaluate management performance effectively
(4)Assure that employees comply with company policies
Which of these objectives are primarily achieved by accounting controls?

Accepted Answer

A)  Objectives 1 and 2 
B)  Objectives 2 and 3 
C)  Objectives 3 and 4 
D)  Objectives 1 and 4 
A)  Objectives 1 and 2 
B)  Objectives 2 and 3 
C)  Objectives 3 and 4 
D)  Objectives 1 and 4

Question 8

The bank statement for Ronson Company included a debit memo for a bank service charge of $58.
Required:
a)Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided.Include dollar amounts of increases and decreases; for cash flow,indicate whether it is an operating activity,investing activity,or financing activity.   b)Is the recognition of the bank service charge an asset source,use,or exchange transaction?

Accepted Answer

a) @#IMG-DLM& b)The bank servi

Question 9

A bank statement debit memo describes a transaction that increases a customer's account balance.

Accepted Answer

A) True 
 B)False

Question 10

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 11

The Sarbanes-Oxley Act

Accepted Answer

A)  was prompted by corporate bankruptcies and audit failures. 
B)  limits an auditor's ability to provide non-audit services to a client. 
C)  clarifies the responsibility of a company's management for its financial statements. 
D)  all of these. 
A)  was prompted by corporate bankruptcies and audit failures. 
B)  limits an auditor's ability to provide non-audit services to a client. 
C)  clarifies the responsibility of a company's management for its financial statements. 
D)  all of these.

Question 12

Effective separation of duties in an organization reduces the likelihood of theft.

Accepted Answer

A) True 
 B)False

Question 13

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Accepted Answer

The answer of During the reconciliation process,an accountant for Swann...

Question 14

Which of the following is not a procedure for the control of cash receipts?

Accepted Answer

A)  Immediate preparation of records of all cash receipts. 
B)  Giving customers written receipts for all monies paid. 
C)  Using prenumbered checks. 
D)  Depositing cash in the bank frequently. 
A)  Immediate preparation of records of all cash receipts. 
B)  Giving customers written receipts for all monies paid. 
C)  Using prenumbered checks. 
D)  Depositing cash in the bank frequently.

Question 15

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

Accepted Answer

The Act required establishment of the Pu

Question 16

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Accepted Answer

A debit memo in the

Question 17

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

Accepted Answer

A) True 
 B)False

Question 18

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

Accepted Answer

A)  Cash. 
B)  Accounts Receivable. 
C)  Accounts Payable. 
D)  Allowance for Doubtful Accounts. 
A)  Cash. 
B)  Accounts Receivable. 
C)  Accounts Payable. 
D)  Allowance for Doubtful Accounts.

Question 19

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Accepted Answer

The answer of While reconciling Swanson Company's bank statement an...

Question 20

Which of the following is not considered an accounting control?

Accepted Answer

A)  Performance evaluations of managers. 
B)  Requiring employees to take vacations or rotate job duties. 
C)  Bonding of employees. 
D)  Use of prenumbered documents. 
A)  Performance evaluations of managers. 
B)  Requiring employees to take vacations or rotate job duties. 
C)  Bonding of employees. 
D)  Use of prenumbered documents.

What is a financial statement audit?

Independent auditors are

Which of the following situations provides the most likely indication that fraud exists?

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Effective internal controls for cash include:

The most favorable opinion that an auditor can express is the

A bank statement debit memo describes a transaction that increases a customer's account balance.

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 Sarbanes-Oxley Act

Effective separation of duties in an organization reduces the likelihood of theft.

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Which of the following is not a procedure for the control of cash receipts?

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Which of the following is not considered an accounting control?

An Introduction to Accounting

Understanding the Accounting Cycle

Accounting for Merchandising Businesses

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, partnerships, and Corporations

Filters

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

What is a financial statement audit?

Independent auditors are

Which of the following situations provides the most likely indication that fraud exists?

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Effective internal controls for cash include:

The most favorable opinion that an auditor can express is the

A bank statement debit memo describes a transaction that increases a customer's account balance.

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 Sarbanes-Oxley Act

Effective separation of duties in an organization reduces the likelihood of theft.

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Which of the following is not a procedure for the control of cash receipts?

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Which of the following is not considered an accounting control?

An Introduction to Accounting

Understanding the Accounting Cycle

Accounting for Merchandising Businesses

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, partnerships, and Corporations

Filters