Question 1

When opening a bank checking account a signature card

Accepted Answer

A)  indicates to whom money is to be paid. 
B)  indicates each person authorized to sign checks on the account. 
C)  is attached to all pre-printed checks. 
D)  is required only when dealing with an out-of-state bank. 
A)  indicates to whom money is to be paid. 
B)  indicates each person authorized to sign checks on the account. 
C)  is attached to all pre-printed checks. 
D)  is required only when dealing with an out-of-state bank.

Question 2

A bank reconciliation should be prepared

Accepted Answer

A)  whenever the bank refuses to lend the company 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 checks. 
A)  whenever the bank refuses to lend the company 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 checks.

Question 3

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 4

A debit balance in Cash Over and Short is reported as a

Accepted Answer

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

Question 5

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

Accepted Answer

safeguard

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

In preparing its August 31 2016 bank reconciliation Oakley Corp. has available the following information: $\begin{array}{lr}
\text { Balance per bank statement, } 8 / 31 / 16 & \$ 65,490 \
\text { Deposit in transit, } 8 / 31 / 16 & 10,170 \
\text { Return of customer's check not sufficient funds, } 8 / 30 / 16 & 1,800 \
\text { Outstanding checks, } 8 / 31 / 16 & 5,820 \
\text { Bank service charges for Auqust } & 350
\end{array}$ At August 31 2016 Oakley's adjusted cash balance is

Accepted Answer

A)  $59670. 
B)  $59320. 
C)  $69840. 
D)  $61140. 
A)  $59670. 
B)  $59320. 
C)  $69840. 
D)  $61140.

Question 9

In the month of November Louis Company Inc. wrote checks in the amount of $15800. In December checks in the amount of $25316 were written. In November $13966 of these checks were presented to the bank for payment and $21667 were presented in December. What is the amount of outstanding checks at the end of November?

Accepted Answer

A)  $1834 
B)  $7701 
C)  $3649 
D)  $9516 
A)  $1834 
B)  $7701 
C)  $3649 
D)  $9516

Question 10

In the month of November Louis Company Inc. wrote checks in the amount of $25770. In December checks in the amount of $34977 were written. In November $24504 of these checks were presented to the bank for payment and $34629 were presented in December. What is the amount of outstanding checks at the end of December?

Accepted Answer

A)  $348 
B)  $19332 
C)  $1614 
D)  $49926 
A)  $348 
B)  $19332 
C)  $1614 
D)  $49926

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

In preparing a bank reconciliation outstanding checks are ______________ from the cash balance per ______________.

Accepted Answer

The answer of In preparing a bank reconciliation outstanding checks...

Question 13

On April 30 the bank reconciliation of Baxter Company shows three outstanding checks: no. 354 $650 no. 355 $820 and no. 357 $615. The May bank statement and the May cash payments journal show the following.
Instructions
Using step 2 in the reconciliation procedure list the outstanding checks at May 31.

Accepted Answer

The outstanding checks are as

Question 14

Control over cash disbursements is generally more effective when

Accepted Answer

A)  all bills are paid in cash. 
B)  disbursements are made by the accounts payable subsidiary clerk. 
C)  payments are made by check. 
D)  all purchases are made on credit. 
A)  all bills are paid in cash. 
B)  disbursements are made by the accounts payable subsidiary clerk. 
C)  payments are made by check. 
D)  all purchases are made on credit.

Question 15

The most important element of the fraud triangle is

Accepted Answer

A)  financial pressure. 
B)  incompatible duties. 
C)  opportunity. 
D)  rationalization. 
A)  financial pressure. 
B)  incompatible duties. 
C)  opportunity. 
D)  rationalization.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

A $100 petty cash fund has cash of $16 and receipts of $80. The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash for $80. 
B)  credit to Petty Cash for $84. 
C)  debit to Cash Over and Short for $4. 
D)  credit to Cash for $80. 
A)  debit to Cash for $80. 
B)  credit to Petty Cash for $84. 
C)  debit to Cash Over and Short for $4. 
D)  credit to Cash for $80.

Question 18

The ______________ of an asset should not have access to the accounting records of that asset.

Accepted Answer

The answer of The ______________ of an asset should not...

Question 19

Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

Accepted Answer

The three main factors that contribute t

Question 20

Hot Sox Company had checks outstanding totaling $18200 on its May bank reconciliation. In June Hot Sox Company issued checks totaling $78900. The July bank statement shows that $71400 in checks cleared the bank in July. A check from one of Hot Sox Company's customers in the amount of $2200 was also returned marked "NSF." The amount of outstanding checks on Hot Sox Company's July bank reconciliation should be

Accepted Answer

A)  $7500. 
B)  $23500. 
C)  $25700. 
D)  $27900. 
A)  $7500. 
B)  $23500. 
C)  $25700. 
D)  $27900.

Exam 8: Fraud, Internal Control, and Cash

When opening a bank checking account a signature card

A bank reconciliation should be prepared

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

A debit balance in Cash Over and Short is reported as a

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

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

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

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

In preparing a bank reconciliation outstanding checks are ______________ from the cash balance per ______________.

Control over cash disbursements is generally more effective when

The most important element of the fraud triangle is

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

A $100 petty cash fund has cash of $16 and receipts of $80. The journal entry to replenish the account would include a

The ______________ of an asset should not have access to the accounting records of that asset.

Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Internal control consists of the related methods and measures adopted to its assets and enhance the and ____ of its accounting records.

In preparing a bank reconciliation outstanding checks are from the cash balance per .