Question 1

Allowing only the treasurer to sign checks is an example of

Accepted Answer

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

Question 2

A highly automated computerized system of accounting eliminates the need for internal control.

Accepted Answer

A) True 
 B)False  False

Question 3

A debit balance in Cash Over and Short is reported as a

Accepted Answer

A)  contra asset. 
B)  miscellaneous asset. 
C)  miscellaneous expense. 
D)  miscellaneous revenue. 
A)  contra asset. 
B)  miscellaneous asset. 
C)  miscellaneous expense. 
D)  miscellaneous revenue. C

Question 4

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Accepted Answer

A)  $44,100. 
B)  $45,000. 
C)  $45,900. 
D)  $62,100. 
A)  $44,100. 
B)  $45,000. 
C)  $45,900. 
D)  $62,100.

Question 5

Related selling activities do not include

Accepted Answer

A)  ordering the merchandise. 
B)  making a sale. 
C)  shipping the goods. 
D)  billing the customer. 
A)  ordering the merchandise. 
B)  making a sale. 
C)  shipping the goods. 
D)  billing the customer.

Question 6

The control principle related to not having the same person authorize and pay for goods is known as

Accepted Answer

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

Question 7

When opening a bank checking account, a signature card

Accepted Answer

A)  indicates to whom money is to be paid. 
B)  indicates each person authorized to sign checks on the account. 
C)  is attached to all pre-printed checks. 
D)  is required only when dealing with an out-of-state bank. 
A)  indicates to whom money is to be paid. 
B)  indicates each person authorized to sign checks on the account. 
C)  is attached to all pre-printed checks. 
D)  is required only when dealing with an out-of-state bank.

Question 8

Proper control for over-the-counter cash receipts includes

Accepted Answer

A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature. 
A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature.

Question 9

An example of poor internal control is

Accepted Answer

A)  The accountant should not have physical custody of the asset nor access to it. 
B)  The custodian of an asset should not maintain or have access to the accounting records. 
C)  One person should be responsible for handling related transactions. 
D)  A salesperson makes the sale, and a different person ships the goods. 
A)  The accountant should not have physical custody of the asset nor access to it. 
B)  The custodian of an asset should not maintain or have access to the accounting records. 
C)  One person should be responsible for handling related transactions. 
D)  A salesperson makes the sale, and a different person ships the goods.

Question 10

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 11

A deposit made by a company will appear on the bank statement as a

Accepted Answer

A)  debit. 
B)  credit. 
C)  debit memorandum. 
D)  credit memorandum. 
A)  debit. 
B)  credit. 
C)  debit memorandum. 
D)  credit memorandum.

Question 12

An employee authorized to sign checks should not record

Accepted Answer

A)  owner cash contributions. 
B)  mail receipts. 
C)  cash disbursement transactions. 
D)  sales transactions. 
A)  owner cash contributions. 
B)  mail receipts. 
C)  cash disbursement transactions. 
D)  sales transactions.

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

Sarbanes Oxley applies to

Accepted Answer

A)  U.S companies but not international companies. 
B)  international companies but not U.S. companies. 
C)  U.S. and Canadian companies but not other international companies. 
D)  U.S and international companies.
IFRS 
A)  U.S companies but not international companies. 
B)  international companies but not U.S. companies. 
C)  U.S. and Canadian companies but not other international companies. 
D)  U.S and international companies.
IFRS

Question 15

Blank checks

Accepted Answer

A)  should be safeguarded. 
B)  should be pre-signed. 
C)  do not need to be safeguarded since they must be signed to be valid. 
D)  should not be prenumbered. 
A)  should be safeguarded. 
B)  should be pre-signed. 
C)  do not need to be safeguarded since they must be signed to be valid. 
D)  should not be prenumbered.

Question 16

IFRS, compared to GAAP, tends to be more

Accepted Answer

A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements.
IFRS 
A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements.
IFRS

Question 17

A debit memorandum would not be issued by the bank for

Accepted Answer

A)  a bank service charge. 
B)  the issuance of traveler's checks. 
C)  the wiring of funds. 
D)  the collection of a notes receivable. 
A)  a bank service charge. 
B)  the issuance of traveler's checks. 
C)  the wiring of funds. 
D)  the collection of a notes receivable.

Question 18

Personnel who handle cash receipts should have the option of taking a vacation or not.

Accepted Answer

A) True 
 B)False

Question 19

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

Accepted Answer

A) True 
 B)False

Question 20

In the month of November, Kinsey Company Inc. wrote checks in the amount of $18,500. In December, checks in the amount of $25,316 were written. In November, $16,936 of these checks were presented to the bank for payment, and $21,766 were presented in December. What is the amount of outstanding checks at the end of November?

Accepted Answer

A)  $1,564 
B)  $4,830 
C)  $5,114 
D)  $6,816 
A)  $1,564 
B)  $4,830 
C)  $5,114 
D)  $6,816

Allowing only the treasurer to sign checks is an example of

A highly automated computerized system of accounting eliminates the need for internal control.

A debit balance in Cash Over and Short is reported as a

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Related selling activities do not include

The control principle related to not having the same person authorize and pay for goods is known as

When opening a bank checking account, a signature card

Proper control for over-the-counter cash receipts includes

An example of poor internal control is

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

A deposit made by a company will appear on the bank statement as a

An employee authorized to sign checks should not record

A voucher system is a series of prescribed control procedures

Sarbanes Oxley applies to

Blank checks

IFRS, compared to GAAP, tends to be more

A debit memorandum would not be issued by the bank for

Personnel who handle cash receipts should have the option of taking a vacation or not.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters

Exam 7: Fraud, Internal Control, and Cash

Allowing only the treasurer to sign checks is an example of

A highly automated computerized system of accounting eliminates the need for internal control.

A debit balance in Cash Over and Short is reported as a

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Related selling activities do not include

The control principle related to not having the same person authorize and pay for goods is known as

When opening a bank checking account, a signature card

Proper control for over-the-counter cash receipts includes

An example of poor internal control is

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

A deposit made by a company will appear on the bank statement as a

An employee authorized to sign checks should not record

A voucher system is a series of prescribed control procedures

Sarbanes Oxley applies to

Blank checks

IFRS, compared to GAAP, tends to be more

A debit memorandum would not be issued by the bank for

Personnel who handle cash receipts should have the option of taking a vacation or not.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters