Exam 7: Fraud, Internal Control, and Cash

Internal control is defined, in part, as a plan that safeguards

Maximum benefit from independent internal verification is obtained when

A remittance advice attached to a company check provides

A bank statement

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

Each of the following items affect the cash balance per books except

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

When making a payment from the petty cash fund for postage stamps, the following journal entry is made. a. Supplies XXXX Petty Cash XXXX b. Postage Expense XXXX Petty Cash XXXX c. Miscellaneous Expense XXXX Petty Cash XXXX d. No entry is made.

The fraud triangle applies to

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

In general, documents should be prenumbered and all documents should be accounted for.

Which one of the following would not cause a bank to debit a depositor's account?

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

The cash account shows a balance of $90,000 before reconciliation. The bank statement does not include a deposit of $5,000 made on the last day of the month. The bank statement shows a collection by the bank of $2,400 and a customer's check for $640 was returned because it was NSF. A customer's check for $900 was recorded on the books as $1,080, and a check written for $138 was recorded as $192. The correct balance in the cash account was

Control over cash disbursements is improved if major expenditures are paid by check.

Collusion may result when one individual circumvents prescribed controls and may significantly impair the effectiveness of a system.

Entries are made to the Petty Cash account when

Internal control is mainly concerned with the amount of authority a supervisor exercises over a subordinate.

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

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.