Question 1

Which one of the following is not a provision in the Sarbanes-Oxley Act?

Accepted Answer

A) Public companies must have their internal control evaluated by the external auditor. 
B) Accounting firms cannot both audit and provide certain consulting services to a client. 
C) Violators will receive a reprimand and further accounting training. 
D) Auditors of public companies are overseen by an oversight board. 
A) Public companies must have their internal control evaluated by the external auditor. 
B) Accounting firms cannot both audit and provide certain consulting services to a client. 
C) Violators will receive a reprimand and further accounting training. 
D) Auditors of public companies are overseen by an oversight board.

Question 2

Service charge and interest on loan are both adjustments required to the bank balance on a bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are pitfalls of E-commerce except:

Accepted Answer

A) stolen credit card numbers. 
B) computer viruses. 
C) reduced credit limits. 
D) phishing. 
A) stolen credit card numbers. 
B) computer viruses. 
C) reduced credit limits. 
D) phishing.

Question 4

Serious breaches of the professional code of conduct can result in criminal prosecution by the professional accounting organizations.

Accepted Answer

A) True 
 B)False

Question 5

The requirement that a store manager approve all returns of merchandise is an example of which characteristic of internal control?

Accepted Answer

A) separation of duties 
B) competent, reliable, and ethical personnel 
C) proper authorization 
D) assignment of responsibilities 
A) separation of duties 
B) competent, reliable, and ethical personnel 
C) proper authorization 
D) assignment of responsibilities

Question 6

Internal control does not:

Accepted Answer

A) help safeguard the assets a business uses in its operations. 
B) guarantee a company will not go bankrupt. 
C) prevent and detect error and fraud. 
D) promote operational efficiency. 
A) help safeguard the assets a business uses in its operations. 
B) guarantee a company will not go bankrupt. 
C) prevent and detect error and fraud. 
D) promote operational efficiency.

Question 7

A lock-box system reduces theft and places the business's cash in circulation faster than if the cash is collected and deposited by company personnel.

Accepted Answer

A) True 
 B)False

Question 8

If a customer's cheque that has been deposited is returned with the bank statement marked "insufficient funds (NSF)," it would appear on the bank reconciliation as a deduction from the ending book balance.

Accepted Answer

A) True 
 B)False

Question 9

If a bookkeeper mistakenly recorded a cheque as $38 instead of the correct amount of $83, the error would be shown on the bank reconciliation as a:

Accepted Answer

A) $45 addition to the book balance. 
B) $45 deduction from the book balance. 
C) $45 deduction from the bank balance. 
D) $45 addition to the bank balance. 
A) $45 addition to the book balance. 
B) $45 deduction from the book balance. 
C) $45 deduction from the bank balance. 
D) $45 addition to the bank balance.

Question 10

One method of achieving confidentiality in e-commerce is:

Accepted Answer

A) using an anti-computer-virus device. 
B) deleting firewalls. 
C) encryption. 
D) using passwords. 
A) using an anti-computer-virus device. 
B) deleting firewalls. 
C) encryption. 
D) using passwords.

Question 11

All of the following are purposes of internal control except to:

Accepted Answer

A) safeguard assets. 
B) promote operational inefficiency. 
C) prevent and detect error and fraud. 
D) ensure accurate and reliable accounting records. 
A) safeguard assets. 
B) promote operational inefficiency. 
C) prevent and detect error and fraud. 
D) ensure accurate and reliable accounting records.

Question 12

Encouraging operational efficiency is one aspect of internal control.

Accepted Answer

A) True 
 B)False

Question 13

The supplier invoice should be matched with the purchase order and receiving report prior to preparing a cheque for payment.

Accepted Answer

A) True 
 B)False

Question 14

The petty cash fund must be replenished on the balance sheet date, otherwise the ledger will not balance.

Accepted Answer

A) True 
 B)False

Question 15

A petty cash fund, established with a $200 balance, had the following petty cash tickets as well as $34 in cash: $$\begin{array} {| l | r| } 
\hline
\text { Office supplies } & \$ 42 \
\hline \text { Delivery expense } & 39 \
\hline \text { Miscellaneous expense } & 12 \
\hline \text { Postage expense } & 75 \
\hline
\end{array}$$ The entry to replenish the fund would be:

Accepted Answer

A)  $$\begin{array} { | c | r | r |} 
\hline \text { Petty Cash } & 168 \
\hline \text { Cash in Bank } & & 168 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 42 & \
\hline \text { Delivery Expense } & 39 & \
\hline \text { Miscellaneous Expense } & 12 & \
\hline \text { Postage Expense } & 75 & \
\hline \text { Cash in Bank } & & 168 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r |} 
\hline \text { Office Supplies } & 42 & \
\hline \text { Delivery Expense } & 32 & \
\hline \text { Miscellaneous Expense } & 12 & \
\hline \text { Postage Expense } & 75 & \
\hline \text { Cash in Bank } & & 166 \
\hline \text { Cash Short and Over } & & 2 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r |} 
\hline \text { Cash in Bank } & 168 \
\hline \text { Petty Cash } & & 168 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r |} 
\hline \text { Petty Cash } & 168 \
\hline \text { Cash in Bank } & & 168 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 42 & \
\hline \text { Delivery Expense } & 39 & \
\hline \text { Miscellaneous Expense } & 12 & \
\hline \text { Postage Expense } & 75 & \
\hline \text { Cash in Bank } & & 168 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r |} 
\hline \text { Office Supplies } & 42 & \
\hline \text { Delivery Expense } & 32 & \
\hline \text { Miscellaneous Expense } & 12 & \
\hline \text { Postage Expense } & 75 & \
\hline \text { Cash in Bank } & & 166 \
\hline \text { Cash Short and Over } & & 2 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r |} 
\hline \text { Cash in Bank } & 168 \
\hline \text { Petty Cash } & & 168 \
\hline
\end{array}$$

Question 16

Cash sales for the day amount to $1,553.83. The cash count of the cash register amounts to $1,554.95. The journal entry to record cash sales for the day will require:

Accepted Answer

A) a debit to Cash for $1,553.83. 
B) a credit to Sales Revenue for $1,554.95. 
C) a debit to Cash Short and Over for $1.12. 
D) a credit to Cash Short and Over for $1.12. 
A) a debit to Cash for $1,553.83. 
B) a credit to Sales Revenue for $1,554.95. 
C) a debit to Cash Short and Over for $1.12. 
D) a credit to Cash Short and Over for $1.12.

Question 17

The three parties to a cheque are the:

Accepted Answer

A) maker, payee, and bank. 
B) bank, maker, and payor. 
C) signer, depositor, and endorser. 
D) bank, payee, and the government. 
A) maker, payee, and bank. 
B) bank, maker, and payor. 
C) signer, depositor, and endorser. 
D) bank, payee, and the government.

Question 18

The following data are available for Dragon Boat Company for March: $$\begin{array} { | l | r | } 
\hline \text { Book balance, March } 31 & \$ 3,620 \
\hline \text { Service charges } & 50 \
\hline \text { Interest revenue } & 35 \
\hline \text { Note collected by bank } & 1,500 \
\hline \text { Cheque returned marked NSF } & 700 \
\hline
\end{array}$$ What is Dragon's adjusted book balance on March 31 from the above data?

Accepted Answer

A) $4,405 
B) $4,200 
C) $3,150 
D) $3,270 
A) $4,405 
B) $4,200 
C) $3,150 
D) $3,270

Question 19

A petty cash fund, established with a $225 balance, had the following petty cash tickets and $14 in cash: $$\begin{array} { | l | r | } 
\hline \text { Office supplies } & \$ 51 \
\hline \text { Delivery expense } & 62 \
\hline \text { Postage expense } & 94 \
\hline
\end{array}$$ The entry to replenish the fund would be:

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Petty Cash } & 207 & \
\hline \text { Cash in Bank } & & 207 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 51 & \
\hline \text { Delivery Expense } & 62 & \
\hline \text { Postage Expense } & 94 & \
\hline \text { Cash Short and Over } & 4 & \
\hline \text { Cash in Bank } & & 211 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 51 & \
\hline \text { Delivery Expense } & 62 & \
\hline \text { Postage Expense } & 94 & \
\hline \text { Cash in Bank } & & 207 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash in Bank } & 211 & \
\hline \text { Petty Cash } & & 211 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Petty Cash } & 207 & \
\hline \text { Cash in Bank } & & 207 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 51 & \
\hline \text { Delivery Expense } & 62 & \
\hline \text { Postage Expense } & 94 & \
\hline \text { Cash Short and Over } & 4 & \
\hline \text { Cash in Bank } & & 211 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Office Supplies } & 51 & \
\hline \text { Delivery Expense } & 62 & \
\hline \text { Postage Expense } & 94 & \
\hline \text { Cash in Bank } & & 207 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Cash in Bank } & 211 & \
\hline \text { Petty Cash } & & 211 \
\hline
\end{array}$$

Question 20

A pharmaceutical company testing drugs to determine possible side effects is a part of:

Accepted Answer

A) monitoring controls. 
B) information systems. 
C) control procedures. 
D) risk assessment. 
A) monitoring controls. 
B) information systems. 
C) control procedures. 
D) risk assessment.

Which one of the following is not a provision in the Sarbanes-Oxley Act?

Service charge and interest on loan are both adjustments required to the bank balance on a bank reconciliation.

All of the following are pitfalls of E-commerce except:

Serious breaches of the professional code of conduct can result in criminal prosecution by the professional accounting organizations.

The requirement that a store manager approve all returns of merchandise is an example of which characteristic of internal control?

Internal control does not:

A lock-box system reduces theft and places the business's cash in circulation faster than if the cash is collected and deposited by company personnel.

If a customer's cheque that has been deposited is returned with the bank statement marked "insufficient funds (NSF)," it would appear on the bank reconciliation as a deduction from the ending book balance.

If a bookkeeper mistakenly recorded a cheque as $38 instead of the correct amount of $83, the error would be shown on the bank reconciliation as a:

One method of achieving confidentiality in e-commerce is:

All of the following are purposes of internal control except to:

Encouraging operational efficiency is one aspect of internal control.

The supplier invoice should be matched with the purchase order and receiving report prior to preparing a cheque for payment.

The petty cash fund must be replenished on the balance sheet date, otherwise the ledger will not balance.

A petty cash fund, established with a $200 balance, had the following petty cash tickets as well as $34 in cash: Office supplies \ 42 Delivery expense 39 Miscellaneous expense 12 Postage expense 75 The entry to replenish the fund would be:

Cash sales for the day amount to $1,553.83. The cash count of the cash register amounts to $1,554.95. The journal entry to record cash sales for the day will require:

The three parties to a cheque are the:

The following data are available for Dragon Boat Company for March: Book balance, March 31 \ 3,620 Service charges 50 Interest revenue 35 Note collected by bank 1,500 Cheque returned marked NSF 700 What is Dragon's adjusted book balance on March 31 from the above data?

A petty cash fund, established with a $225 balance, had the following petty cash tickets and $14 in cash: Office supplies \ 51 Delivery expense 62 Postage expense 94 The entry to replenish the fund would be:

A pharmaceutical company testing drugs to determine possible side effects is a part of:

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 8: Internal Control and Cash

Which one of the following is not a provision in the Sarbanes-Oxley Act?

Service charge and interest on loan are both adjustments required to the bank balance on a bank reconciliation.

All of the following are pitfalls of E-commerce except:

Serious breaches of the professional code of conduct can result in criminal prosecution by the professional accounting organizations.

The requirement that a store manager approve all returns of merchandise is an example of which characteristic of internal control?

Internal control does not:

A lock-box system reduces theft and places the business's cash in circulation faster than if the cash is collected and deposited by company personnel.

If a customer's cheque that has been deposited is returned with the bank statement marked "insufficient funds (NSF)," it would appear on the bank reconciliation as a deduction from the ending book balance.

If a bookkeeper mistakenly recorded a cheque as $38 instead of the correct amount of $83, the error would be shown on the bank reconciliation as a:

One method of achieving confidentiality in e-commerce is:

All of the following are purposes of internal control except to:

Encouraging operational efficiency is one aspect of internal control.

The supplier invoice should be matched with the purchase order and receiving report prior to preparing a cheque for payment.

The petty cash fund must be replenished on the balance sheet date, otherwise the ledger will not balance.

A petty cash fund, established with a $200 balance, had the following petty cash tickets as well as $34 in cash: Office supplies \ 42 Delivery expense 39 Miscellaneous expense 12 Postage expense 75 The entry to replenish the fund would be:

Cash sales for the day amount to $1,553.83. The cash count of the cash register amounts to $1,554.95. The journal entry to record cash sales for the day will require:

The three parties to a cheque are the:

The following data are available for Dragon Boat Company for March: Book balance, March 31 \ 3,620 Service charges 50 Interest revenue 35 Note collected by bank 1,500 Cheque returned marked NSF 700 What is Dragon's adjusted book balance on March 31 from the above data?

A petty cash fund, established with a $225 balance, had the following petty cash tickets and $14 in cash: Office supplies \ 51 Delivery expense 62 Postage expense 94 The entry to replenish the fund would be:

A pharmaceutical company testing drugs to determine possible side effects is a part of:

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters