Question 1

Physical controls to safeguard assets do not include

Accepted Answer

A)  cashier department supervisors. 
B)  vaults. 
C)  safety deposit boxes. 
D)  locked warehouses. 
A)  cashier department supervisors. 
B)  vaults. 
C)  safety deposit boxes. 
D)  locked warehouses. A

Question 2

Segregation of duties among employees eliminates the possibility of collusion.

Accepted Answer

A) True 
 B)False  False

Question 3

An example of segregation of duties is having a cheque signer record cash disbursements.

Accepted Answer

A) True 
 B)False  False

Question 4

NSF cheques received from customers are debited by the bank to the depositor's account.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is true in terms of an internal control system?

Accepted Answer

A)  A good internal control system will help a company achieve reliable financial reporting, effective and efficient operations, and compliance with laws and regulations. 
B)  An internal control system cannot be considered effective until the possibility of human error has been completely eliminated. 
C)  Only large companies need to be concerned with a system of internal control. 
D)  The extent of internal control activities adopted by a company must not be evaluated in terms of cost-benefit. 
A)  A good internal control system will help a company achieve reliable financial reporting, effective and efficient operations, and compliance with laws and regulations. 
B)  An internal control system cannot be considered effective until the possibility of human error has been completely eliminated. 
C)  Only large companies need to be concerned with a system of internal control. 
D)  The extent of internal control activities adopted by a company must not be evaluated in terms of cost-benefit.

Question 6

Internal controls may be limited by each of the following except

Accepted Answer

A)  the size of the business. 
B)  the human element. 
C)  internal audits. 
D)  collusion. 
A)  the size of the business. 
B)  the human element. 
C)  internal audits. 
D)  collusion.

Question 7

Maximum benefit from review and reconciliation 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 8

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is false?

Accepted Answer

A)  A basic principle of cash management is to increase the speed of paying liabilities. 
B)  A company should plan the timing of major expenditures in light of its operating cycle. 
C)  A cash budget will help determine if additional financing will be necessary. 
D)  A key principle of cash management is to increase the speed of collection on receivables. 
A)  A basic principle of cash management is to increase the speed of paying liabilities. 
B)  A company should plan the timing of major expenditures in light of its operating cycle. 
C)  A cash budget will help determine if additional financing will be necessary. 
D)  A key principle of cash management is to increase the speed of collection on receivables.

Question 10

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 11

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

Accepted Answer

A) True 
 B)False

Question 12

Two employees at a retail store work the same cash register. You evaluate this situation as

Accepted Answer

A)  a violation of assignment of responsibility. 
B)  a violation of segregation of duties. 
C)  supporting assignment of responsibility. 
D)  supporting review and reconciliation. 
A)  a violation of assignment of responsibility. 
B)  a violation of segregation of duties. 
C)  supporting assignment of responsibility. 
D)  supporting review and reconciliation.

Question 13

The independent audit committee of the board of directors is not responsible for reviewing the company's internal control systems to ensure that they are adequate to result in

Accepted Answer

A)  fair financial results. 
B)  complete financial results. 
C)  reasonable financial results. 
D)  accurate financial results. 
A)  fair financial results. 
B)  complete financial results. 
C)  reasonable financial results. 
D)  accurate financial results.

Question 14

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 $86 recorded as $68 by the depositor 
B)  deposit of $300 recorded by the bank as $30 
C)  a paid cheque for $600 recorded by the bank as $60 
D)  cheque for $28 recorded as $82 by the depositor 
A)  cheque for $86 recorded as $68 by the depositor 
B)  deposit of $300 recorded by the bank as $30 
C)  a paid cheque for $600 recorded by the bank as $60 
D)  cheque for $28 recorded as $82 by the depositor

Question 15

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

Accepted Answer

A)  addition to the balance per books 
B)  deduction from the balance per books 
C)  addition to the balance per bank 
D)  deduction from the balance per bank 
A)  addition to the balance per books 
B)  deduction from the balance per books 
C)  addition to the balance per bank 
D)  deduction from the balance per bank

Question 16

Which of the following would not be included in the determination of cash equivalents?

Accepted Answer

A)  bank overdrafts 
B)  90 day treasury bills 
C)  restricted cash 
D)  money markets 
A)  bank overdrafts 
B)  90 day treasury bills 
C)  restricted cash 
D)  money markets

Question 17

Cash restricted in use should be reported separately on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 18

In preparing a bank reconciliation, outstanding cheques are

Accepted Answer

A)  added to the balance per bank. 
B)  deducted from the balance per books. 
C)  added to the balance per books. 
D)  deducted from the balance per bank. 
A)  added to the balance per bank. 
B)  deducted from the balance per books. 
C)  added to the balance per books. 
D)  deducted from the balance per bank.

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

On Andrew Corp.'s April bank reconciliation, cheques outstanding totalled $9,620. In May, the corporation issued cheques totalling $26,800. The May bank statement shows that $24,250 in cheques cleared the bank in May. A cheque from one of Andrew Corp.'s customers in the amount of $325 was also returned marked "NSF." The amount of outstanding cheques on Andrew's May bank reconciliation should be

Accepted Answer

A)  $2,550. 
B)  $11,845. 
C)  $12,495. 
D)  $12,170. 
A)  $2,550. 
B)  $11,845. 
C)  $12,495. 
D)  $12,170.

Physical controls to safeguard assets do not include

Segregation of duties among employees eliminates the possibility of collusion.

An example of segregation of duties is having a cheque signer record cash disbursements.

NSF cheques received from customers are debited by the bank to the depositor's account.

Which of the following statements is true in terms of an internal control system?

Internal controls may be limited by each of the following except

Maximum benefit from review and reconciliation is obtained when

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Which of the following statements is false?

Cash equivalents are

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

Two employees at a retail store work the same cash register. You evaluate this situation as

The independent audit committee of the board of directors is not responsible for reviewing the company's internal control systems to ensure that they are adequate to result in

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

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

Which of the following would not be included in the determination of cash equivalents?

Cash restricted in use should be reported separately on the statement of financial position.

In preparing a bank reconciliation, outstanding cheques are

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

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

Physical controls to safeguard assets do not include

Segregation of duties among employees eliminates the possibility of collusion.

An example of segregation of duties is having a cheque signer record cash disbursements.

NSF cheques received from customers are debited by the bank to the depositor's account.

Which of the following statements is true in terms of an internal control system?

Internal controls may be limited by each of the following except

Maximum benefit from review and reconciliation is obtained when

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Which of the following statements is false?

Cash equivalents are

An authorized signing officer should sign a cheque only after reviewing the appropriate supporting documentation.

Two employees at a retail store work the same cash register. You evaluate this situation as

The independent audit committee of the board of directors is not responsible for reviewing the company's internal control systems to ensure that they are adequate to result in

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

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

Which of the following would not be included in the determination of cash equivalents?

Cash restricted in use should be reported separately on the statement of financial position.

In preparing a bank reconciliation, outstanding cheques are

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

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