Question 1

Two limitations of systems of internal control are the concept of ______________ and the ______________.

Accepted Answer

reasonable

Question 2

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 3

The three main factors that contribute to fraudulent activity are depicted by the _______________.

Accepted Answer

The answer of The three main factors that contribute to...

Question 4

Identify which of the following reconciling items would require an adjusting entry to be made by Danielle Doyle Company.
1. Deposits in transit totaled $2,000.
2. A check written to the company for $415 by Cartography Company was returned NSF.
3. The bank charged the company $25 for printing checks.
4. Outstanding checks totaled $3,300
5. A debit memorandum reported an EFT of $178 to Salome Utilities

Accepted Answer

Adjusting entries would be req

Question 5

Winter Gloves Company had checks outstanding totaling $12,800 on its May bank reconciliation. In June, Winter Gloves Company issued checks totaling $79,800. The July bank statement shows that $71,400 in checks cleared the bank in July. A check from one of Winter Gloves Company's customers in the amount of $2,000 was also returned marked "NSF." The amount of outstanding checks on Winter Gloves Company's July bank reconciliation should be

Accepted Answer

A)  $8,400. 
B)  $19,200. 
C)  $21,200. 
D)  $23,200. 
A)  $8,400. 
B)  $19,200. 
C)  $21,200. 
D)  $23,200.

Question 6

Jukebox Company had checks outstanding totaling $10,800 on its June bank reconciliation. In July, Jukebox Company issued checks totaling $77,800. The July bank statement shows that $76,600 in checks cleared the bank in July. A check from one of Jukebox Company's customers in the amount of $1,000 was also returned marked "NSF." The amount of outstanding checks on Jukebox Company's July bank reconciliation should be

Accepted Answer

A)  $1,200. 
B)  $11,000. 
C)  $12,000. 
D)  $13,000. 
A)  $1,200. 
B)  $11,000. 
C)  $12,000. 
D)  $13,000.

Question 7

An exception to disbursements being made by check is acceptable when cash is paid

Accepted Answer

A)  to an owner. 
B)  to employees as wages. 
C)  from petty cash. 
D)  to employees as loans. 
A)  to an owner. 
B)  to employees as wages. 
C)  from petty cash. 
D)  to employees as loans.

Question 8

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

Accepted Answer

A) True 
 B)False

Question 9

IFRS, compared to GAAP, tends to be more

Accepted Answer

A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements.
IFRS 
A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements.
IFRS

Question 10

A remittance advice attached to a company check provides

Accepted Answer

A)  details about the running cash balance in the checking account. 
B)  the magnetic bank routing numbers. 
C)  the explanation of the purpose of the check. 
D)  the signature space for the maker. 
A)  details about the running cash balance in the checking account. 
B)  the magnetic bank routing numbers. 
C)  the explanation of the purpose of the check. 
D)  the signature space for the maker.

Question 11

Using _______________ documents is a control measure which helps in accounting for all documents in a series and also prevents a document from being recorded more than once.

Accepted Answer

The answer of Using _______________ documents is a control measure...

Question 12

Which of the following is not one of the main factors that contribute to fraudulent activity?

Accepted Answer

A)  Opportunity. 
B)  Incompatible duties. 
C)  Financial Pressure. 
D)  Rationalization. 
A)  Opportunity. 
B)  Incompatible duties. 
C)  Financial Pressure. 
D)  Rationalization.

Question 13

An adjusting entry is not required for

Accepted Answer

A)  outstanding checks. 
B)  collection of a note by the bank. 
C)  NSF checks. 
D)  bank service charges. 
A)  outstanding checks. 
B)  collection of a note by the bank. 
C)  NSF checks. 
D)  bank service charges.

Question 14

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation:   The adjusted cash balance per books on July 31 is

Accepted Answer

A)  $17,640. 
B)  $18,840. 
C)  $25,640. 
D)  $26,840. 
A)  $17,640. 
B)  $18,840. 
C)  $25,640. 
D)  $26,840.

Question 15

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 16

The fraud triangle applies to

Accepted Answer

A)  U.S companies but not international companies. 
B)  international companies but not U.S. companies. 
C)  U.S. and Canadian companies but not other international companies. 
D)  U.S and international companies.
IFRS 
A)  U.S companies but not international companies. 
B)  international companies but not U.S. companies. 
C)  U.S. and Canadian companies but not other international companies. 
D)  U.S and international companies.
IFRS

Question 17

All of the following are parties to a check except the

Accepted Answer

A)  bank. 
B)  Federal Reserve. 
C)  maker. 
D)  payee. 
A)  bank. 
B)  Federal Reserve. 
C)  maker. 
D)  payee.

Question 18

The control principle related to not having the same person authorize and pay for goods is known as

Accepted Answer

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

Question 19

Allowing only designated personnel to handle cash receipts 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 20

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

Accepted Answer

A)  inadequate internal control. 
B)  duplication of effort. 
C)  external verification. 
D)  segregation of duties. 
A)  inadequate internal control. 
B)  duplication of effort. 
C)  external verification. 
D)  segregation of duties.

Exam 7: Fraud, Internal Control, and Cash

Two limitations of systems of internal control are the concept of ______________ and the ______________.

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

The three main factors that contribute to fraudulent activity are depicted by the _______________.

An exception to disbursements being made by check is acceptable when cash is paid

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

IFRS, compared to GAAP, tends to be more

A remittance advice attached to a company check provides

Using _______________ documents is a control measure which helps in accounting for all documents in a series and also prevents a document from being recorded more than once.

Which of the following is not one of the main factors that contribute to fraudulent activity?

An adjusting entry is not required for

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation: The adjusted cash balance per books on July 31 is

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.

The fraud triangle applies to

All of the following are parties to a check except the

The control principle related to not having the same person authorize and pay for goods is known as

Allowing only designated personnel to handle cash receipts is an example of

Having one person post entries to accounts receivable subsidiary ledger and a different person post to the Accounts Receivable Control account in the general ledger is an example of

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations Perpetual Approach

Inventories Periodic Approach

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Stock Transactions, and Stockholders Equity

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Pricing

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Time Value of Money

Investments

Payroll Accounting

Subsidiary Ledgers and Special Journals

Other Significant Liabilities

Filters

Two limitations of systems of internal control are the concept of and the .