Question 1

Maximum benefit from independent checks of performance is obtained when

Accepted Answer

A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the external audit. 
A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the external audit.

Question 2

For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

Accepted Answer

A) Cheque for $43 recorded as $34 by the depositor 
B) Deposit of $500 recorded by the bank as $50 
C) A paid cheque for $200 recorded by the bank as $20 
D) Cheque for $35 recorded as $53 by the depositor 
A) Cheque for $43 recorded as $34 by the depositor 
B) Deposit of $500 recorded by the bank as $50 
C) A paid cheque for $200 recorded by the bank as $20 
D) Cheque for $35 recorded as $53 by the depositor

Question 3

On a bank reconciliation, which of the following would be deducted from the balance per bank?

Accepted Answer

A) Outstanding cheques 
B) Deposits in transit 
C) Electronic payment by a customer on account 
D) Bank service charges 
A) Outstanding cheques 
B) Deposits in transit 
C) Electronic payment by a customer on account 
D) Bank service charges

Question 4

A key principle of cash management is to increase the speed of collection on receivables.

Accepted Answer

A) True 
 B)False

Question 5

Cash equivalents are

Accepted Answer

A) often combined with cash and reported as a current asset. 
B) usually reported as a non-current asset. 
C) reported as a current liability. 
D) included as a compensating balance. 
A) often combined with cash and reported as a current asset. 
B) usually reported as a non-current asset. 
C) reported as a current liability. 
D) included as a compensating balance.

Question 6

Allowing only the treasurer to sign cheques is an example of which control activity?

Accepted Answer

A) Documentation 
B) Segregation of duties 
C) Human resource controls 
D) Authorization of transactions and activities 
A) Documentation 
B) Segregation of duties 
C) Human resource controls 
D) Authorization of transactions and activities

Question 7

NSF cheques received are accounted for by adding them to the cash balance per books.

Accepted Answer

A) True 
 B)False

Question 8

Island Corporation gathered the following reconciling information in preparing its September bank reconciliation:   The adjusted cash balance per bank at September 30 is

Accepted Answer

A) $ 1,775. 
B) $ 6,500. 
C) $ 9,725. 
D) $15,725. 
A) $ 1,775. 
B) $ 6,500. 
C) $ 9,725. 
D) $15,725.

Question 9

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

Accepted Answer

A) Bank service charge 
B) Outstanding cheques 
C) A customer's NSF cheque 
D) Electronic payment on account 
A) Bank service charge 
B) Outstanding cheques 
C) A customer's NSF cheque 
D) Electronic payment on account

Question 10

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 11

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 12

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 13

Which of the following is(are) considered cash?

Accepted Answer

A) Debit cards only 
B) Debit cards and bank credit cards 
C) Bank credit cards only 
D) Debit cards and all types of credit cards 
A) Debit cards only 
B) Debit cards and bank credit cards 
C) Bank credit cards only 
D) Debit cards and all types of credit cards

Question 14

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 15

A company should plan the timing of major expenditures in light of its operating cycle.

Accepted Answer

A) True 
 B)False

Question 16

A system of internal control can only provide reasonable assurance, which is based on the belief that

Accepted Answer

A) the system is infallible. 
B) the system can always detect errors and irregularities. 
C) the costs of establishing control activities should not be greater than their expected benefit. 
D) the human element is not important. 
A) the system is infallible. 
B) the system can always detect errors and irregularities. 
C) the costs of establishing control activities should not be greater than their expected benefit. 
D) the human element is not important.

Question 17

Errors give rise to unintentional misstatements in the financial statements.

Accepted Answer

A) True 
 B)False

Question 18

Independent internal reviews should be done

Accepted Answer

A) at the end of each accounting period. 
B) at the end of each month. 
C) periodically on a surprise basis. 
D) by the external auditor. 
A) at the end of each accounting period. 
B) at the end of each month. 
C) periodically on a surprise basis. 
D) by the external auditor.

Question 19

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 20

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

Accepted Answer

A) Bank service charge 
B) Collection of a note receivable 
C) Payment of a note payable 
D) Cheques marked NSF 
A) Bank service charge 
B) Collection of a note receivable 
C) Payment of a note payable 
D) Cheques marked NSF

Maximum benefit from independent checks of performance is obtained when

For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

On a bank reconciliation, which of the following would be deducted from the balance per bank?

A key principle of cash management is to increase the speed of collection on receivables.

Cash equivalents are

Allowing only the treasurer to sign cheques is an example of which control activity?

NSF cheques received are accounted for by adding them to the cash balance per books.

Island Corporation gathered the following reconciling information in preparing its September bank reconciliation: The adjusted cash balance per bank at September 30 is

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

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

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

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

Which of the following is(are) considered cash?

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

A company should plan the timing of major expenditures in light of its operating cycle.

A system of internal control can only provide reasonable assurance, which is based on the belief that

Errors give rise to unintentional misstatements in the financial statements.

Independent internal reviews should be done

All of the following are examples of a control activity except

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 7: Internal Control and Cash

Maximum benefit from independent checks of performance is obtained when

For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

On a bank reconciliation, which of the following would be deducted from the balance per bank?

A key principle of cash management is to increase the speed of collection on receivables.

Cash equivalents are

Allowing only the treasurer to sign cheques is an example of which control activity?

NSF cheques received are accounted for by adding them to the cash balance per books.

Island Corporation gathered the following reconciling information in preparing its September bank reconciliation: The adjusted cash balance per bank at September 30 is

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

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

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

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

Which of the following is(are) considered cash?

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

A company should plan the timing of major expenditures in light of its operating cycle.

A system of internal control can only provide reasonable assurance, which is based on the belief that

Errors give rise to unintentional misstatements in the financial statements.

Independent internal reviews should be done

All of the following are examples of a control activity except

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

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters