Question 1

GAAP, compared to IFRS, tends to be more

Accepted Answer

A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements.
IFRS 
A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements.
IFRS

Question 2

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Accepted Answer

A) True 
 B)False

Question 3

Only large companies need to be concerned with a system of internal control.

Accepted Answer

A) True 
 B)False

Question 4

The principle of internal control that prevents one individual from being responsible for all the related activities of a given task is ______________.

Accepted Answer

segregatio

Question 5

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

Accepted Answer

safeguard

Question 6

In preparing its bank reconciliation for the month of April 2018, Delano, Inc. has available the following information. $\begin{array}{lr}
\text { Balance per bank statement, 4/30/18 } & \$ 78,600 \
\text { NSF check returned with 4/30/18 bank statement } & 940 \
\text { Deposits in transit, } 4 / 30 / 18 & 10,000 \
\text { Outstanding checks, } 4 / 30 / 18 & 10,400 \
\text { Bank service charges for April } & 60
\end{array}$ What should be the adjusted cash balance at April 30, 2018?

Accepted Answer

A)  $77,260. 
B)  $77,600. 
C)  $78,020. 
D)  $78,200. 
A)  $77,260. 
B)  $77,600. 
C)  $78,020. 
D)  $78,200.

Question 7

From an internal control standpoint, the asset most susceptible to improper diversion and use is

Accepted Answer

A)  prepaid insurance. 
B)  cash. 
C)  buildings. 
D)  land. 
A)  prepaid insurance. 
B)  cash. 
C)  buildings. 
D)  land.

Question 8

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

Accepted Answer

A)  Cash for $88. 
B)  Petty Cash for $88. 
C)  Cash Over and Short for $2. 
D)  Cash for $85. 
A)  Cash for $88. 
B)  Petty Cash for $88. 
C)  Cash Over and Short for $2. 
D)  Cash for $85.

Question 9

An adjusting entry is not required for

Accepted Answer

A)  outstanding checks. 
B)  collection of a note by the bank. 
C)  NSF checks. 
D)  bank service charges. 
A)  outstanding checks. 
B)  collection of a note by the bank. 
C)  NSF checks. 
D)  bank service charges.

Question 10

Cash registers are an important internal control device used in controlling over-the-counter receipts.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following is not an objective of a system of internal controls?

Accepted Answer

A)  Safeguard company assets 
B)  Overstate liabilities in order to be conservative 
C)  Enhance the accuracy and reliability of accounting records 
D)  Reduce the risks of errors 
A)  Safeguard company assets 
B)  Overstate liabilities in order to be conservative 
C)  Enhance the accuracy and reliability of accounting records 
D)  Reduce the risks of errors

Question 12

Bank errors

Accepted Answer

A)  occur because of time lags. 
B)  must be corrected by debits. 
C)  are infrequent in occurrence. 
D)  are corrected by making an adjusting entry on the depositor's books. 
A)  occur because of time lags. 
B)  must be corrected by debits. 
C)  are infrequent in occurrence. 
D)  are corrected by making an adjusting entry on the depositor's books.

Question 13

A voucher system is a series of prescribed control procedures

Accepted Answer

A)  to check the credit worthiness of customers. 
B)  designed to assure that disbursements by check are proper. 
C)  which eliminates the need for a sales journal. 
D)  specifically designed for small firms who may not have checking accounts. 
A)  to check the credit worthiness of customers. 
B)  designed to assure that disbursements by check are proper. 
C)  which eliminates the need for a sales journal. 
D)  specifically designed for small firms who may not have checking accounts.

Question 14

Cash equivalents are defined by IFRS as

Accepted Answer

A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  short-term, highly liquid investments that are readily convertible into known amounts of cash.
IFRS 
A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  short-term, highly liquid investments that are readily convertible into known amounts of cash.
IFRS

Question 15

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

Accepted Answer

A)  inadequate internal control. 
B)  duplication of effort. 
C)  external verification. 
D)  segregation of duties. 
A)  inadequate internal control. 
B)  duplication of effort. 
C)  external verification. 
D)  segregation of duties.

Question 16

Important objectives of a system of internal controls are to safeguard assets and to enhance the accuracy and reliability of the accounting records. Briefly discuss how (1) cost-benefit considerations, (2) the human element, and (3) the size of the business, affect the implementation of a system of internal controls.
b. Dean, here are some reasons why you must develop a system of internal controls:

Accepted Answer

The implementation of a system of intern

Question 17

A segregation of duties among employees eliminates the possibility of collusion.

Accepted Answer

A) True 
 B)False

Question 18

Allowing only designated personnel to handle cash receipts is an example of

Accepted Answer

A)  establishment of responsibility. 
B)  segregation of duties. 
C)  documentation procedures. 
D)  independent internal verification. 
A)  establishment of responsibility. 
B)  segregation of duties. 
C)  documentation procedures. 
D)  independent internal verification.

Question 19

Rebekah Grace has worked for Specoly Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

Accepted Answer

A)  other controls. 
B)  establishment of responsibility. 
C)  physical controls. 
D)  documentation procedures. 
A)  other controls. 
B)  establishment of responsibility. 
C)  physical controls. 
D)  documentation procedures.

Question 20

A check returned by the bank marked "NSF" means

Accepted Answer

A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled-out. 
D)  not sufficient funds. 
A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled-out. 
D)  not sufficient funds.

GAAP, compared to IFRS, tends to be more

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Only large companies need to be concerned with a system of internal control.

The principle of internal control that prevents one individual from being responsible for all the related activities of a given task is ______________.

Internal control consists of the related methods and measures adopted to its assets and enhance the and ____ of its accounting records.

From an internal control standpoint, the asset most susceptible to improper diversion and use is

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

An adjusting entry is not required for

Cash registers are an important internal control device used in controlling over-the-counter receipts.

Which one of the following is not an objective of a system of internal controls?

Bank errors

A voucher system is a series of prescribed control procedures

Cash equivalents are defined by IFRS as

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

A segregation of duties among employees eliminates the possibility of collusion.

Allowing only designated personnel to handle cash receipts is an example of

Rebekah Grace has worked for Specoly Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

A check returned by the bank marked "NSF" means

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Exam 7: Fraud, Internal Control, and Cash

GAAP, compared to IFRS, tends to be more

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Only large companies need to be concerned with a system of internal control.

The principle of internal control that prevents one individual from being responsible for all the related activities of a given task is ______________.

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

From an internal control standpoint, the asset most susceptible to improper diversion and use is

A $100 petty cash fund has cash of $12 and receipts of $85. The journal entry to replenish the account would include a credit to

An adjusting entry is not required for

Cash registers are an important internal control device used in controlling over-the-counter receipts.

Which one of the following is not an objective of a system of internal controls?

Bank errors

A voucher system is a series of prescribed control procedures

Cash equivalents are defined by IFRS as

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

A segregation of duties among employees eliminates the possibility of collusion.

Allowing only designated personnel to handle cash receipts is an example of

Rebekah Grace has worked for Specoly Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

A check returned by the bank marked "NSF" means

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters

Internal control consists of the related methods and measures adopted to its assets and enhance the and ____ of its accounting records.