Question 1

The components of internal control do NOT include:

Accepted Answer

A) control environment. 
B) risk assessment. 
C) control procedures. 
D) safeguard assets. 
A) control environment. 
B) risk assessment. 
C) control procedures. 
D) safeguard assets.

Question 2

The Nichols Company borrowed $32,000 from the bank and agreed to keep $3000 on deposit at all times. The stated rate of interest on the loan is 9%. What is the real rate of interest?

Accepted Answer

A) 9% 
B) 9.4% 
C) 9.9% 
D) 10.3% 
A) 9% 
B) 9.4% 
C) 9.9% 
D) 10.3%

Question 3

A petty cash fund:

Accepted Answer

A) is established to pay large nonrecurring expenses. 
B) is established to pay for minor purchases. 
C) should have a least two custodians. 
D) should issue checks for certain purchases. 
A) is established to pay large nonrecurring expenses. 
B) is established to pay for minor purchases. 
C) should have a least two custodians. 
D) should issue checks for certain purchases.

Question 4

Gia Company has the following information available:   What is the amount of Cash to be listed on the balance sheet?

Accepted Answer

A) $0 
B) $300,000 
C) $3,800,000 
D) $4,800,000 
A) $0 
B) $300,000 
C) $3,800,000 
D) $4,800,000

Question 5

Small companies cannot have internal controls since they do not have enough employees to segregate duties.

Accepted Answer

A) True 
 B)False

Question 6

The Public Company Accounting Oversight Board was created to oversee the:

Accepted Answer

A) SEC. 
B) management of public companies. 
C) audits of public companies. 
D) American Institute of Certified Public Accountants. 
A) SEC. 
B) management of public companies. 
C) audits of public companies. 
D) American Institute of Certified Public Accountants.

Question 7

When a company receives customers' checks by mail:

Accepted Answer

A) the mailroom sends all customer checks to the treasurer, who has the cashier deposit the checks in the bank. 
B) the treasurer prepares the journal entries. 
C) the mailroom employee prepares the journal entries. 
D) the treasury department cashier prepares the journal entries. 
A) the mailroom sends all customer checks to the treasurer, who has the cashier deposit the checks in the bank. 
B) the treasurer prepares the journal entries. 
C) the mailroom employee prepares the journal entries. 
D) the treasury department cashier prepares the journal entries.

Question 8

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 9

________ rearranges messages by a mathematical formula making the message impossible to read by someone who does not know the code.

Accepted Answer

A) Encryption 
B) Firewall 
C) Security wall 
D) Access device 
A) Encryption 
B) Firewall 
C) Security wall 
D) Access device

Question 10

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 11

Three key duties that must always be separated under a good system of internal controls are:

Accepted Answer

A) asset handling, record keeping and transaction approval. 
B) asset handling, hiring and safeguarding of assets. 
C) asset handling, recordkeeping and safeguarding of assets. 
D) record keeping, transaction analysis and transaction approval. 
A) asset handling, record keeping and transaction approval. 
B) asset handling, hiring and safeguarding of assets. 
C) asset handling, recordkeeping and safeguarding of assets. 
D) record keeping, transaction analysis and transaction approval.

Question 12

Internal control is a plan of organization and system of procedures, implemented by company ________ and the ________, designed to accomplish five objectives.

Accepted Answer

A) internal auditors, employees 
B) external auditors, management 
C) management, board of directors 
D) external auditors, board of directors 
A) internal auditors, employees 
B) external auditors, management 
C) management, board of directors 
D) external auditors, board of directors

Question 13

A company's petty cash fund:

Accepted Answer

A) cannot be replaced by the use of debit cards. 
B) is kept by two or more employees to ensure that disbursements can readily be made. 
C) is opened with a particular amount of cash. 
D) balance equals the cash left in the petty cash fund minus the total of the paid vouchers in the cash box. 
A) cannot be replaced by the use of debit cards. 
B) is kept by two or more employees to ensure that disbursements can readily be made. 
C) is opened with a particular amount of cash. 
D) balance equals the cash left in the petty cash fund minus the total of the paid vouchers in the cash box.

Question 14

Which of the following items from the bank reconciliation require a journal entry?

Accepted Answer

A) bank errors 
B) deposits in transit 
C) outstanding checks 
D) charge for printing of checks 
A) bank errors 
B) deposits in transit 
C) outstanding checks 
D) charge for printing of checks

Question 15

Examples of internal control procedures do NOT include:

Accepted Answer

A) proper segregation of duties. 
B) adequate records. 
C) proper approvals. 
D) risk assessment. 
A) proper segregation of duties. 
B) adequate records. 
C) proper approvals. 
D) risk assessment.

Question 16

The following information is available for George Company at March 31:
∙ Adjusted bank balance as of March 31 was $6,450.
∙ Outstanding checks totaled $850.
∙ A customer's check for $260 was returned due to nonsufficient funds.
∙ March's service charge was $25.
∙ The bank collected an account receivable of $1,550.
∙ A new bookkeeper made the following errors:
# 930 for Rent Expense written for $900, recorded as $90
#1207 for Office Equipment written for $8,450, recorded as $4,850.
Forgot to record a cash sale of $1,000.
∙ A deposit was shown on the bank statement as $965, when the deposit ticket was correctly totaled to be $695.
∙ Deposits made at month-end totaled $4,516; these were not shown on bank statement.
Prepare a bank reconciliation to determine:
(1)the balance per bank at March 31 before any reconciling items,
(2)the balance in the Cash account at March 31 before any reconciling items.

Accepted Answer

The answer of The following information is available for George...

Question 17

A recent cash budget showed estimated cash receipts of $164,000, estimated cash payments of $160,000, and a desired ending cash balance of $15,000, with no new financing. The beginning cash balance was:

Accepted Answer

A) $11,000. 
B) $19,000. 
C) $15,000. 
D) unknown. 
A) $11,000. 
B) $19,000. 
C) $15,000. 
D) unknown.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Which of the following are examples of the misappropriation of assets?

Accepted Answer

A) An employee overstates an expense reimbursement request after a company trip. 
B) An employee theft of inventory. 
C) A kickback scheme in the purchasing function. 
D) all of the above 
A) An employee overstates an expense reimbursement request after a company trip. 
B) An employee theft of inventory. 
C) A kickback scheme in the purchasing function. 
D) all of the above

Question 20

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

Accepted Answer

A) True 
 B)False

The components of internal control do NOT include:

The Nichols Company borrowed $32,000 from the bank and agreed to keep $3000 on deposit at all times. The stated rate of interest on the loan is 9%. What is the real rate of interest?

A petty cash fund:

Gia Company has the following information available: What is the amount of Cash to be listed on the balance sheet?

Small companies cannot have internal controls since they do not have enough employees to segregate duties.

The Public Company Accounting Oversight Board was created to oversee the:

When a company receives customers' checks by mail:

Which statement is FALSE?

________ rearranges messages by a mathematical formula making the message impossible to read by someone who does not know the code.

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

Three key duties that must always be separated under a good system of internal controls are:

Internal control is a plan of organization and system of procedures, implemented by company and the , designed to accomplish five objectives.

A company's petty cash fund:

Which of the following items from the bank reconciliation require a journal entry?

Examples of internal control procedures do NOT include:

A recent cash budget showed estimated cash receipts of $164,000, estimated cash payments of $160,000, and a desired ending cash balance of $15,000, with no new financing. The beginning cash balance was:

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

Which of the following are examples of the misappropriation of assets?

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Internal Control Cash

The components of internal control do NOT include:

The Nichols Company borrowed $32,000 from the bank and agreed to keep $3000 on deposit at all times. The stated rate of interest on the loan is 9%. What is the real rate of interest?

A petty cash fund:

Gia Company has the following information available: What is the amount of Cash to be listed on the balance sheet?

Small companies cannot have internal controls since they do not have enough employees to segregate duties.

The Public Company Accounting Oversight Board was created to oversee the:

When a company receives customers' checks by mail:

Which statement is FALSE?

________ rearranges messages by a mathematical formula making the message impossible to read by someone who does not know the code.

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

Three key duties that must always be separated under a good system of internal controls are:

Internal control is a plan of organization and system of procedures, implemented by company ________ and the ________, designed to accomplish five objectives.

A company's petty cash fund:

Which of the following items from the bank reconciliation require a journal entry?

Examples of internal control procedures do NOT include:

A recent cash budget showed estimated cash receipts of $164,000, estimated cash payments of $160,000, and a desired ending cash balance of $15,000, with no new financing. The beginning cash balance was:

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

Which of the following are examples of the misappropriation of assets?

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

Internal control is a plan of organization and system of procedures, implemented by company and the , designed to accomplish five objectives.