Question 1

If a bookkeeper mistakenly records a disbursement as $12 instead of the correct amount of $21, the error should be shown on the bank reconciliation as a:

Accepted Answer

A) $9 addition to the balance per books. 
B) $9 deduction from the balance per books. 
C) $33 addition to the balance per books. 
D) $33 deduction from the balance per books. 
A) $9 addition to the balance per books. 
B) $9 deduction from the balance per books. 
C) $33 addition to the balance per books. 
D) $33 deduction from the balance per books.

Question 2

Enron Corporation committed fraudulent financial reporting by

Accepted Answer

A) reporting expenses as plant assets. 
B) overstating profits through bogus sales of nonexistent assets with inflated values. 
C) bribing employees of the Securities and Exchange Commission. 
D) all of the above 
A) reporting expenses as plant assets. 
B) overstating profits through bogus sales of nonexistent assets with inflated values. 
C) bribing employees of the Securities and Exchange Commission. 
D) all of the above

Question 3

When preparing the bank reconciliation, if the adjusted book balance and the adjusted bank balance disagree, this may indicate:

Accepted Answer

A) an error made in preparing the bank reconciliation. 
B) stealing of cash by an employee in the business. 
C) fraudulent financial reporting. 
D) A and B. 
A) an error made in preparing the bank reconciliation. 
B) stealing of cash by an employee in the business. 
C) fraudulent financial reporting. 
D) A and B.

Question 4

The primary way that fraud is prevented, detected, or corrected is through a proper system of:

Accepted Answer

A) ethical standards and a code of ethics. 
B) policies developed by upper management. 
C) internal control. 
D) internal and external audits. 
A) ethical standards and a code of ethics. 
B) policies developed by upper management. 
C) internal control. 
D) internal and external audits.

Question 5

Fraud is a major problem in many businesses throughout the world.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements regarding restricted amounts of cash is CORRECT?

Accepted Answer

A) The Cash balance includes amounts that are restricted. 
B) The minimum balance, under a compensating balance agreement, is the same as cash. 
C) None of the Cash balance is restricted in any way. 
D) Restricted amounts of cash need to be separately disclosed as such on the statement of stockholders' equity. 
A) The Cash balance includes amounts that are restricted. 
B) The minimum balance, under a compensating balance agreement, is the same as cash. 
C) None of the Cash balance is restricted in any way. 
D) Restricted amounts of cash need to be separately disclosed as such on the statement of stockholders' equity.

Question 7

The Sarbanes-Oxley Act of 2002:

Accepted Answer

A) requires public companies to issue an internal control report. 
B) requires an outside auditor to evaluate the soundness of a public company's internal controls. 
C) allows an accounting firm to both audit a public client and also provide certain consulting services for the same client. 
D) A and B 
A) requires public companies to issue an internal control report. 
B) requires an outside auditor to evaluate the soundness of a public company's internal controls. 
C) allows an accounting firm to both audit a public client and also provide certain consulting services for the same client. 
D) A and B

Question 8

In a bank reconciliation, a bank service charge for printing checks is:

Accepted Answer

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

Question 9

Use the information below to prepare a bank reconciliation for Martindale Company for the month of January.
∙ Outstanding checks as of January 31 amounted to $2,223.
∙ Deposits in transit as of January 31 amounted to $1,879.
∙ The ending balance per the January bank statement is $36,482.
∙ The bank statement shows that Martindale earned $150 of interest on its bank balance for the month of January.
∙ The bank mistakenly recorded a deposit of $2,800 as $280 on January 15.
∙ The company pays its insurance of $986 by EFT.
∙ The bank collected rent for the company, $3,000. The bank statement shows an EFT receipt from a Martindale customer of $481.
∙ There was a NSF check on the bank statement for $368.
∙ The ending cash balance per the books for January before any adjustments was $36,381.

Accepted Answer

The answer of Use the information below to prepare a...

Question 10

In the cash budget, new financing is needed if:

Accepted Answer

A) the cash available before new financing exceeds the budgeted cash balance. 
B) the budgeted cash balance exceeds the cash available before new financing. 
C) the cash used for investing exceeds the budgeted cash balance. 
D) the budgeted cash balance exceeds the cash used for investing. 
A) the cash available before new financing exceeds the budgeted cash balance. 
B) the budgeted cash balance exceeds the cash available before new financing. 
C) the cash used for investing exceeds the budgeted cash balance. 
D) the budgeted cash balance exceeds the cash used for investing.

Question 11

Once the company receives newly purchased inventory, it prepares a(n)________ to list the goods received.

Accepted Answer

A) invoice 
B) purchase approval form 
C) receiving report 
D) EFT transfer 
A) invoice 
B) purchase approval form 
C) receiving report 
D) EFT transfer

Question 12

The general rule that all major groups of transactions should be supported by either hard copy documents or electronic records is part of the control procedure of:

Accepted Answer

A) limited access. 
B) segregation of duties. 
C) adequate records. 
D) proper approvals. 
A) limited access. 
B) segregation of duties. 
C) adequate records. 
D) proper approvals.

Question 13

Carrie Heffernan, Inc., has the following assets at the end of the year:
   Prepare the current assets section of the balance sheet for this company.

Accepted Answer

Current Assets:
 @#IMG-DLM& *Petty cash fund $1,00

Question 14

Cash and cash equivalents do NOT include:

Accepted Answer

A) time deposits. 
B) petty cash. 
C) bank checking account. 
D) high-grade U.S. government securities maturing in 5 years. 
A) time deposits. 
B) petty cash. 
C) bank checking account. 
D) high-grade U.S. government securities maturing in 5 years.

Question 15

Examples of items purchased with petty cash are:

Accepted Answer

A) delivery cost for package. 
B) taxi fare for executive of company. 
C) box of name tags for convention. 
D) all of the above. 
A) delivery cost for package. 
B) taxi fare for executive of company. 
C) box of name tags for convention. 
D) all of the above.

Question 16

For companies that are too small to hire enough employees to properly separate duties,the key to good internal control is getting the owner to perform which of the following duties:

Accepted Answer

A) approving all transactions. 
B) reconciling the monthly bank account or making bank deposits. 
C) reconciling the monthly bank account and making bank deposits. 
D) The owner should not perform any of the above duties. 
A) approving all transactions. 
B) reconciling the monthly bank account or making bank deposits. 
C) reconciling the monthly bank account and making bank deposits. 
D) The owner should not perform any of the above duties.

Question 17

A company has a policy that all checks over $5,000 need to have the signature of the owner in addition to the signature of the bookkeeper. This is an example of:

Accepted Answer

A) limited access. 
B) proper approvals. 
C) adequate records. 
D) encryption. 
A) limited access. 
B) proper approvals. 
C) adequate records. 
D) encryption.

Question 18

The ending bank statement balance at November 30 is $7000. The bank statement shows a service charge of $85, electronic funds receipts of $600 and a NSF check for $250. Deposits in transit total $2,050 and outstanding checks are $1,835. The balance per books at November 30 is $6950. What is the adjusted book balance at November 30?

Accepted Answer

A) $7265 
B) $7165 
C) $7215 
D) $8715 
A) $7265 
B) $7165 
C) $7215 
D) $8715

Question 19

The bookkeeper recorded a deposit of $700 as $70. On the bank reconciliation, this will be a(n):

Accepted Answer

A) addition of $630 to the balance per bank. 
B) subtraction of $630 from the balance per bank. 
C) addition of $630 to the balance per books. 
D) subtraction of $630 to the balance per books. 
A) addition of $630 to the balance per bank. 
B) subtraction of $630 from the balance per bank. 
C) addition of $630 to the balance per books. 
D) subtraction of $630 to the balance per books.

Question 20

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

Accepted Answer

A) True 
 B)False

If a bookkeeper mistakenly records a disbursement as $12 instead of the correct amount of $21, the error should be shown on the bank reconciliation as a:

Enron Corporation committed fraudulent financial reporting by

When preparing the bank reconciliation, if the adjusted book balance and the adjusted bank balance disagree, this may indicate:

The primary way that fraud is prevented, detected, or corrected is through a proper system of:

Fraud is a major problem in many businesses throughout the world.

Which of the following statements regarding restricted amounts of cash is CORRECT?

The Sarbanes-Oxley Act of 2002:

In a bank reconciliation, a bank service charge for printing checks is:

In the cash budget, new financing is needed if:

Once the company receives newly purchased inventory, it prepares a(n)________ to list the goods received.

The general rule that all major groups of transactions should be supported by either hard copy documents or electronic records is part of the control procedure of:

Carrie Heffernan, Inc., has the following assets at the end of the year: Prepare the current assets section of the balance sheet for this company.

Cash and cash equivalents do NOT include:

Examples of items purchased with petty cash are:

For companies that are too small to hire enough employees to properly separate duties,the key to good internal control is getting the owner to perform which of the following duties:

A company has a policy that all checks over $5,000 need to have the signature of the owner in addition to the signature of the bookkeeper. This is an example of:

The bookkeeper recorded a deposit of $700 as $70. On the bank reconciliation, this will be a(n):

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

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

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Exam 4: Internal Control Cash

If a bookkeeper mistakenly records a disbursement as $12 instead of the correct amount of $21, the error should be shown on the bank reconciliation as a:

Enron Corporation committed fraudulent financial reporting by

When preparing the bank reconciliation, if the adjusted book balance and the adjusted bank balance disagree, this may indicate:

The primary way that fraud is prevented, detected, or corrected is through a proper system of:

Fraud is a major problem in many businesses throughout the world.

Which of the following statements regarding restricted amounts of cash is CORRECT?

The Sarbanes-Oxley Act of 2002:

In a bank reconciliation, a bank service charge for printing checks is:

In the cash budget, new financing is needed if:

Once the company receives newly purchased inventory, it prepares a(n)________ to list the goods received.

The general rule that all major groups of transactions should be supported by either hard copy documents or electronic records is part of the control procedure of:

Carrie Heffernan, Inc., has the following assets at the end of the year: Prepare the current assets section of the balance sheet for this company.

Cash and cash equivalents do NOT include:

Examples of items purchased with petty cash are:

For companies that are too small to hire enough employees to properly separate duties,the key to good internal control is getting the owner to perform which of the following duties:

A company has a policy that all checks over $5,000 need to have the signature of the owner in addition to the signature of the bookkeeper. This is an example of:

The bookkeeper recorded a deposit of $700 as $70. On the bank reconciliation, this will be a(n):

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

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