Question 1

Match between columns
                        Premises: Insurance protection against misappropriation of assets.
Prevent a transaction from being recorded more than once.
Cash that is not available for general use, but instead is restricted for a particular purpose.
Checks which have been returned by the maker's bank for lack of funds.
Document indicating the purpose of a petty cash expenditure.
Highly liquid investments.
Anything that a bank will accept for deposit.
Physical control devices.
Two or more employees circumventing prescribed procedures.
A projection of anticipated cash flows.
A basic principle of cash management.
Issued checks that have not been paid by the bank.
Checks which have been paid by the depositor's bank.
Segregation of duties.

Accepted Answer

The Answer of Restricted cash and Cash and Cash equivalents is...

Question 2

Cash equivalents do not include

Accepted Answer

A)  money market accounts. 
B)  commercial paper. 
C)  U.S. Treasury bills. 
D)  long-term investment. 
A)  money market accounts. 
B)  commercial paper. 
C)  U.S. Treasury bills. 
D)  long-term investment.

Question 3

Internal auditors

Accepted Answer

A)  are hired by CPA firms to audit business firms. 
B)  are employees of the IRS 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 company that employs them because they are not independent. 
A)  are hired by CPA firms to audit business firms. 
B)  are employees of the IRS 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 company that employs them because they are not independent.

Question 4

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 5

Internal control measures

Accepted Answer

A)  only apply to publicly traded companies. 
B)  are in place to safeguard assets. 
C)  can eliminate all irregularities in the accounting process. 
D)  All of these answer choices are correct. 
A)  only apply to publicly traded companies. 
B)  are in place to safeguard assets. 
C)  can eliminate all irregularities in the accounting process. 
D)  All of these answer choices are correct.

Question 6

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

Accepted Answer

A) True 
 B)False

Question 7

Petersen Company is preparing a cash budget for September. The company's cash balance on September 1 is $17,400. The company anticipates cash receipts of $83,850 and cash disbursements of $87,990. If Petersen desires a cash balance of $18,000, it must

Accepted Answer

A)  acquire financing of $600. 
B)  acquire financing of $4,740. 
C)  acquire financing of $3,540. 
D)  acquire financing of $13,860. 
A)  acquire financing of $600. 
B)  acquire financing of $4,740. 
C)  acquire financing of $3,540. 
D)  acquire financing of $13,860.

Question 8

Which of the following is not an internal control activity for cash?

Accepted Answer

A)  The number of persons who have access to cash should be limited. 
B)  The functions of record keeping and maintaining custody of cash should be combined. 
C)  Surprise audits of cash on hand should be made occasionally. 
D)  All cash receipts should be recorded promptly. 
A)  The number of persons who have access to cash should be limited. 
B)  The functions of record keeping and maintaining custody of cash should be combined. 
C)  Surprise audits of cash on hand should be made occasionally. 
D)  All cash receipts should be recorded promptly.

Question 9

Allowing only the treasurer to sign checks is an example of

Accepted Answer

A)  documentation procedures. 
B)  separation of duties. 
C)  other controls. 
D)  establishment of responsibility. 
A)  documentation procedures. 
B)  separation of duties. 
C)  other controls. 
D)  establishment of responsibility.

Question 10

A system of internal control

Accepted Answer

A)  is infallible. 
B)  can be rendered ineffective by employee collusion. 
C)  invariably will have costs exceeding benefits. 
D)  is premised on the concept of absolute assurance. 
A)  is infallible. 
B)  can be rendered ineffective by employee collusion. 
C)  invariably will have costs exceeding benefits. 
D)  is premised on the concept of absolute assurance.

Question 11

An example of segregation of duties is having a check signer recording cash disbursements.

Accepted Answer

A) True 
 B)False

Question 12

A check correctly written for $370 was incorrectly entered in the cash payments journal for $730. In preparing a bank reconciliation, $____________ must be ______________ the cash balance per ______________.

Accepted Answer

$360 ,adde

Question 13

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by ______________ and by ______________ in recording transactions by either party.

Accepted Answer

The answer of The difference between the cash in bank...

Question 14

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

Accepted Answer

A)  Cost of establishing control procedures should not exceed their benefit. 
B)  The human element. 
C)  Collusion. 
D)  The size of the company. 
A)  Cost of establishing control procedures should not exceed their benefit. 
B)  The human element. 
C)  Collusion. 
D)  The size of the company.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Accepted Answer

A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets. 
A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets.

Question 17

Of the following employees, who should prepare the bank reconciliation?

Accepted Answer

A)  Anne, the bookkeeper, because she is aware of all transactions that affected cash. 
B)  Michael, the treasurer, because he has control of the checkbook and has taken more accounting courses than any other employee. 
C)  Mary, the cashier, because she does not pay bills. 
D)  Frank, the purchasing agent, because he does not work in the accounting department. 
A)  Anne, the bookkeeper, because she is aware of all transactions that affected cash. 
B)  Michael, the treasurer, because he has control of the checkbook and has taken more accounting courses than any other employee. 
C)  Mary, the cashier, because she does not pay bills. 
D)  Frank, the purchasing agent, because he does not work in the accounting department.

Question 18

The reconciliation of the cash register tape with the cash in the register 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 19

Which of the following is not an internal control activity for cash?

Accepted Answer

A)  All payments should be made with currency, not checks. 
B)  Banking facilities should be used as much as possible. 
C)  The amount of cash on hand should be kept to a minimum. 
D)  Employees who have access to cash should be bonded. 
A)  All payments should be made with currency, not checks. 
B)  Banking facilities should be used as much as possible. 
C)  The amount of cash on hand should be kept to a minimum. 
D)  Employees who have access to cash should be bonded.

Question 20

Control over cash disbursements is improved if major expenditures are paid by check.

Accepted Answer

A) True 
 B)False

Cash equivalents do not include

Internal auditors

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.

Internal control measures

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

Petersen Company is preparing a cash budget for September. The company's cash balance on September 1 is $17,400. The company anticipates cash receipts of $83,850 and cash disbursements of $87,990. If Petersen desires a cash balance of $18,000, it must

Which of the following is not an internal control activity for cash?

Allowing only the treasurer to sign checks is an example of

A system of internal control

An example of segregation of duties is having a check signer recording cash disbursements.

A check correctly written for $370 was incorrectly entered in the cash payments journal for $730. In preparing a bank reconciliation, $ must be the cash balance per ____.

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by and by in recording transactions by either party.

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

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

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Of the following employees, who should prepare the bank reconciliation?

The reconciliation of the cash register tape with the cash in the register is an example of

Which of the following is not an internal control activity for cash?

Control over cash disbursements is improved if major expenditures are paid by check.

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 Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

Exam 7: Fraud, Internal Control, and Cash

Cash equivalents do not include

Internal auditors

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.

Internal control measures

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

Petersen Company is preparing a cash budget for September. The company's cash balance on September 1 is $17,400. The company anticipates cash receipts of $83,850 and cash disbursements of $87,990. If Petersen desires a cash balance of $18,000, it must

Which of the following is not an internal control activity for cash?

Allowing only the treasurer to sign checks is an example of

A system of internal control

An example of segregation of duties is having a check signer recording cash disbursements.

A check correctly written for $370 was incorrectly entered in the cash payments journal for $730. In preparing a bank reconciliation, $____________ must be ______________ the cash balance per ______________.

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by ______________ and by ______________ in recording transactions by either party.

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

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

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Of the following employees, who should prepare the bank reconciliation?

The reconciliation of the cash register tape with the cash in the register is an example of

Which of the following is not an internal control activity for cash?

Control over cash disbursements is improved if major expenditures are paid by check.

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 Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments and Acquisitions in Accounting

Filters

A check correctly written for $370 was incorrectly entered in the cash payments journal for $730. In preparing a bank reconciliation, $ must be the cash balance per ____.

The difference between the cash in bank balance shown on the company's books and the cash balance shown on the bank statement may be caused by and by in recording transactions by either party.