Question 1

A bank statement

Accepted Answer

A) lets a depositor know the financial position of the bank as of a certain date. 
B) is a credit reference letter written by the depositor's bank. 
C) is a bill from the bank for services provided. 
D) shows the activity that increased or decreased the depositor's account balance. 
A) lets a depositor know the financial position of the bank as of a certain date. 
B) is a credit reference letter written by the depositor's bank. 
C) is a bill from the bank for services provided. 
D) shows the activity that increased or decreased the depositor's account balance.

Question 2

A cheque written by the company for $157 is incorrectly recorded as $175.On the bank reconciliation, the $18 error should be

Accepted Answer

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

Question 3

Which of the following is not a good control activity over cash?

Accepted Answer

A) Payments to creditors should be made in cash. 
B) There should be limited access to cash. 
C) The amount of cash on hand should be kept at a minimum. 
D) Cash should be deposited daily. 
A) Payments to creditors should be made in cash. 
B) There should be limited access to cash. 
C) The amount of cash on hand should be kept at a minimum. 
D) Cash should be deposited daily.

Question 4

A good system of internal control does not require monitoring.

Accepted Answer

A) True 
 B)False

Question 5

Internal auditors

Accepted Answer

A) are hired by independent accounting firms to audit companies. 
B) are employees of the government who evaluate the internal controls of companies filing tax returns. 
C) evaluate the system of internal controls for the companies that employ them. 
D) cannot evaluate the system of internal controls of the companies that employ them because they are not independent. 
A) are hired by independent accounting firms to audit companies. 
B) are employees of the government who evaluate the internal controls of companies filing tax returns. 
C) evaluate the system of internal controls for the companies that employ them. 
D) cannot evaluate the system of internal controls of the companies that employ them because they are not independent.

Question 6

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a limitation of internal control?

Accepted Answer

A) cost of establishing control procedures 
B) the human element 
C) use of a bank account 
D) the size of the company 
A) cost of establishing control procedures 
B) the human element 
C) use of a bank account 
D) the size of the company

Question 8

An employee authorized to sign cheques should not record

Accepted Answer

A) shipping documents. 
B) mail receipts. 
C) cash disbursement transactions. 
D) sales transactions. 
A) shipping documents. 
B) mail receipts. 
C) cash disbursement transactions. 
D) sales transactions.

Question 9

Cash equivalents

Accepted Answer

A) include all investments in shares. 
B) include short-term, highly liquid trading investments plus accounts receivable less any bank overdrafts. 
C) include short-term, highly liquid trading investments less any bank overdrafts. 
D) are reported as non-current assets. 
A) include all investments in shares. 
B) include short-term, highly liquid trading investments plus accounts receivable less any bank overdrafts. 
C) include short-term, highly liquid trading investments less any bank overdrafts. 
D) are reported as non-current assets.

Question 10

A cheque returned by the bank marked "NSF" means

Accepted Answer

A) no service fee. 
B) no signature found. 
C) not satisfactorily filled out. 
D) not sufficient funds. 
A) no service fee. 
B) no signature found. 
C) not satisfactorily filled out. 
D) not sufficient funds.

Question 11

An NSF cheque that was received is recorded as an account receivable.

Accepted Answer

A) True 
 B)False

Question 12

An accounts payable clerk also has cheque signing authority.Which control procedure is violated?

Accepted Answer

A) authorization of transactions and activities 
B) independent checks of performance 
C) documentation 
D) segregation of duties 
A) authorization of transactions and activities 
B) independent checks of performance 
C) documentation 
D) segregation of duties

Question 13

Ms.Greene has worked for Ambleside Inc.for 20 years without taking a vacation.An internal control activity that would address this situation would be

Accepted Answer

A) human resource controls. 
B) authorization of transactions and activities. 
C) physical controls. 
D) documentation. 
A) human resource controls. 
B) authorization of transactions and activities. 
C) physical controls. 
D) documentation.

Question 14

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

Accepted Answer

A) True 
 B)False

A bank statement

A cheque written by the company for $157 is incorrectly recorded as $175.On the bank reconciliation, the $18 error should be

Which of the following is not a good control activity over cash?

A good system of internal control does not require monitoring.

Internal auditors

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

Which of the following is not a limitation of internal control?

An employee authorized to sign cheques should not record

Cash equivalents

A cheque returned by the bank marked "NSF" means

An NSF cheque that was received is recorded as an account receivable.

An accounts payable clerk also has cheque signing authority.Which control procedure is violated?

Ms.Greene has worked for Ambleside Inc.for 20 years without taking a vacation.An internal control activity that would address this situation would be

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

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

A bank statement

A cheque written by the company for $157 is incorrectly recorded as $175.On the bank reconciliation, the $18 error should be

Which of the following is not a good control activity over cash?

A good system of internal control does not require monitoring.

Internal auditors

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

Which of the following is not a limitation of internal control?

An employee authorized to sign cheques should not record

Cash equivalents

A cheque returned by the bank marked "NSF" means

An NSF cheque that was received is recorded as an account receivable.

An accounts payable clerk also has cheque signing authority.Which control procedure is violated?

Ms.Greene has worked for Ambleside Inc.for 20 years without taking a vacation.An internal control activity that would address this situation would be

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

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