Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Deposits in transit

Accepted Answer

A)  have been recorded on the company's books but not yet by the bank. 
B)  have been recorded by the bank but not yet by the company. 
C)  have not been recorded by the bank or the company. 
D)  are checks from customers which have not yet been received by the company. 
A)  have been recorded on the company's books but not yet by the bank. 
B)  have been recorded by the bank but not yet by the company. 
C)  have not been recorded by the bank or the company. 
D)  are checks from customers which have not yet been received by the company.

Question 3

Journal entries are required by the depositor for all of the following except

Accepted Answer

A)  collection of a note receivable. 
B)  bank errors. 
C)  bank service charges. 
D)  an NSF check. 
A)  collection of a note receivable. 
B)  bank errors. 
C)  bank service charges. 
D)  an NSF check.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Under a voucher system, a prenumbered voucher is prepared for every

Accepted Answer

A)  cash receipt, regardless of source. 
B)  transaction entered into by the business. 
C)  expenditure except those made from petty cash. 
D)  journal entry. 
A)  cash receipt, regardless of source. 
B)  transaction entered into by the business. 
C)  expenditure except those made from petty cash. 
D)  journal entry.

Question 6

Internal controls are not designed to safeguard assets from

Accepted Answer

A)  natural disasters. 
B)  employee theft. 
C)  robbery. 
D)  unauthorized use. 
A)  natural disasters. 
B)  employee theft. 
C)  robbery. 
D)  unauthorized use.

Question 7

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Accepted Answer

A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets. 
A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets.

Question 8

The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.

Accepted Answer

A) True 
 B)False

Question 9

The daily cash count of cash register receipts made by department supervisors is an example of

Accepted Answer

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

Question 10

Having different individuals receive cash, record cash receipts, and hold the cash 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 11

For accounting purposes, postdated checks (checks payable in the future) are considered to be

Accepted Answer

A)  money orders. 
B)  cash. 
C)  petty cash. 
D)  accounts receivable. 
A)  money orders. 
B)  cash. 
C)  petty cash. 
D)  accounts receivable.

Question 12

Which one of the following is not necessarily a party to a check?

Accepted Answer

A)  Maker 
B)  Buyer 
C)  Payee 
D)  Payer 
A)  Maker 
B)  Buyer 
C)  Payee 
D)  Payer

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A credit balance in Cash Over and Short is reported as a(n)

Accepted Answer

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

Question 15

A bank may issue a credit memorandum for

Accepted Answer

A)  a bank service charge. 
B)  an NSF (not sufficient funds) check from a customer. 
C)  the collection of a note receivable for the depositor by the bank. 
D)  the cost of printing checks. 
A)  a bank service charge. 
B)  an NSF (not sufficient funds) check from a customer. 
C)  the collection of a note receivable for the depositor by the bank. 
D)  the cost of printing checks.

Question 16

If employees are bonded

Accepted Answer

A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company. 
A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company.

Question 17

The size of the petty cash fund is dependent on

Accepted Answer

A)  the wishes of the custodian of the fund. 
B)  anticipated disbursements for the year. 
C)  anticipated disbursements for a three- to four-week period. 
D)  the size of the regular cash account. 
A)  the wishes of the custodian of the fund. 
B)  anticipated disbursements for the year. 
C)  anticipated disbursements for a three- to four-week period. 
D)  the size of the regular cash account.

Question 18

In a voucher system, vouchers are prepared in the accounts receivable department.

Accepted Answer

A) True 
 B)False

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

Deposits in transit

Journal entries are required by the depositor for all of the following except

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

Under a voucher system, a prenumbered voucher is prepared for every

Internal controls are not designed to safeguard assets from

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.

The daily cash count of cash register receipts made by department supervisors is an example of

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

For accounting purposes, postdated checks (checks payable in the future) are considered to be

Which one of the following is not necessarily a party to a check?

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

A credit balance in Cash Over and Short is reported as a(n)

A bank may issue a credit memorandum for

If employees are bonded

The size of the petty cash fund is dependent on

In a voucher system, vouchers are prepared in the accounts receivable department.

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

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

Deposits in transit

Journal entries are required by the depositor for all of the following except

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

Under a voucher system, a prenumbered voucher is prepared for every

Internal controls are not designed to safeguard assets from

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit.

The daily cash count of cash register receipts made by department supervisors is an example of

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

For accounting purposes, postdated checks (checks payable in the future) are considered to be

Which one of the following is not necessarily a party to a check?

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

A credit balance in Cash Over and Short is reported as a(n)

A bank may issue a credit memorandum for

If employees are bonded

The size of the petty cash fund is dependent on

In a voucher system, vouchers are prepared in the accounts receivable department.

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