Exam 4: Internal Control And Cash

A physical count of inventory is required even though the company uses the perpetual inventory system. This is an example of which of the following internal control activities?

Which of the following procedures is incorrect for establishing and maintaining a petty cash fund?

Which of the following statements best describes the act of collusion?

A credit memo appeared on the September bank statement. How should this amount be treated on the September bank reconciliation?

Which of the following is not a requirement of a company's top managers under the Sarbanes-Oxley Act?

You have just accepted a part-time job at one of the campus eateries. During your training the manager was called away to deal with some crisis and asked one of your co-workers to complete your training on using the cash register. The co-worker proceeds to tell you that if the money in the register drawer doesn't equal the total on the cash register tape, you will be responsible for the difference. If there is a cash shortage, you must make up the shortage out of your own pocket but if there is excess cash, you may keep the overage. Proudly, with the wink of an eye, she states, "I was short one time, right after I started working here. But I made sure, if you know what I mean, that I would never be short again." A) Evaluate this control. Is it strong or weak? What kind of behavior will it encourage? B) Do you have a professional obligation to report your co-worker to management? Explain.

A company's control environment is primarily influenced by the tone at the top. This refers to each of the following except