Question 1

The person responsible for making credit sales should be the vice-president of finance.

Accepted Answer

A) True 
 B)False

Question 2

Internal controls may be limited by each of the following except

Accepted Answer

A) the size of the business. 
B) the human element. 
C) bonding of employees. 
D) collusion. 
A) the size of the business. 
B) the human element. 
C) bonding of employees. 
D) collusion.

Question 3

All of the following are examples of a control activity except

Accepted Answer

A) an extensive marketing plan. 
B) bonding of employees. 
C) segregation of duties. 
D) recording of all transactions. 
A) an extensive marketing plan. 
B) bonding of employees. 
C) segregation of duties. 
D) recording of all transactions.

Question 4

A bank reconciliation should be prepared

Accepted Answer

A) whenever the bank refuses to lend the depositor money. 
B) when an employee is suspected of fraud. 
C) to explain any difference between the depositor's balance per books and the balance per bank. 
D) by the person who is authorized to sign cheques. 
A) whenever the bank refuses to lend the depositor money. 
B) when an employee is suspected of fraud. 
C) to explain any difference between the depositor's balance per books and the balance per bank. 
D) by the person who is authorized to sign cheques.

Question 5

All of the following are examples of a control activity except

Accepted Answer

A) using prenumbered documents. 
B) reconciling the bank statement. 
C) insistence that employees work overtime. 
D) insistence that employees take vacations. 
A) using prenumbered documents. 
B) reconciling the bank statement. 
C) insistence that employees work overtime. 
D) insistence that employees take vacations.

Question 6

Control activities are most effective when several people are responsible for a given task.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Risk assessment is one component of a good system of internal control.

Accepted Answer

A) True 
 B)False

Question 9

In large companies, independent checks of performance are often assigned to

Accepted Answer

A) shift supervisors. 
B) management. 
C) internal auditors. 
D) external auditors. 
A) shift supervisors. 
B) management. 
C) internal auditors. 
D) external auditors.

Question 10

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

Accepted Answer

A) True 
 B)False

Question 11

A basic principle of cash management is to increase the speed of paying liabilities.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following bank reconciliation items would require an adjusting entry on the depositor's books?

Accepted Answer

A) error by the bank 
B) outstanding cheques 
C) bank service charge 
D) deposit in transit 
A) error by the bank 
B) outstanding cheques 
C) bank service charge 
D) deposit in transit

Question 13

The custodian of a company asset should

Accepted Answer

A) not be bonded. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant. 
A) not be bonded. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant.

Question 14

Prepare a bank reconciliation.

Accepted Answer

In reconciling the bank account, it is c

Question 15

In preparing a bank reconciliation, outstanding cheques are

Accepted Answer

A) added to the balance per bank. 
B) deducted from the balance per books. 
C) added to the balance per books. 
D) deducted from the balance per bank. 
A) added to the balance per bank. 
B) deducted from the balance per books. 
C) added to the balance per books. 
D) deducted from the balance per bank.

Question 16

The use of a bank account makes internal control over cash more difficult.

Accepted Answer

A) True 
 B)False

Question 17

Background checks of prospective employees are not necessary when a company has an effective system of internal control.

Accepted Answer

A) True 
 B)False

Question 18

An internal control system cannot be considered effective until the possibility of human error has been completely eliminated.

Accepted Answer

A) True 
 B)False

Question 19

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are examples of a control activity except

Accepted Answer

A) limit access to assets. 
B) independent internal reviews. 
C) authorization of transactions. 
D) increasing the speed of collection on receivables. 
A) limit access to assets. 
B) independent internal reviews. 
C) authorization of transactions. 
D) increasing the speed of collection on receivables.

The person responsible for making credit sales should be the vice-president of finance.

Internal controls may be limited by each of the following except

All of the following are examples of a control activity except

A bank reconciliation should be prepared

All of the following are examples of a control activity except

Control activities are most effective when several people are responsible for a given task.

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

Risk assessment is one component of a good system of internal control.

In large companies, independent checks of performance are often assigned to

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

A basic principle of cash management is to increase the speed of paying liabilities.

Which of the following bank reconciliation items would require an adjusting entry on the depositor's books?

The custodian of a company asset should

Prepare a bank reconciliation.

In preparing a bank reconciliation, outstanding cheques are

The use of a bank account makes internal control over cash more difficult.

Background checks of prospective employees are not necessary when a company has an effective system of internal control.

An internal control system cannot be considered effective until the possibility of human error has been completely eliminated.

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

All of the following are examples of a control activity except

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters

Exam 7: Fraud, Internal Control, and Cash

The person responsible for making credit sales should be the vice-president of finance.

Internal controls may be limited by each of the following except

All of the following are examples of a control activity except

A bank reconciliation should be prepared

All of the following are examples of a control activity except

Control activities are most effective when several people are responsible for a given task.

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

Risk assessment is one component of a good system of internal control.

In large companies, independent checks of performance are often assigned to

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

A basic principle of cash management is to increase the speed of paying liabilities.

Which of the following bank reconciliation items would require an adjusting entry on the depositor's books?

The custodian of a company asset should

Prepare a bank reconciliation.

In preparing a bank reconciliation, outstanding cheques are

The use of a bank account makes internal control over cash more difficult.

Background checks of prospective employees are not necessary when a company has an effective system of internal control.

An internal control system cannot be considered effective until the possibility of human error has been completely eliminated.

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

All of the following are examples of a control activity except

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters