Question 1

Sarbanes Oxley 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. 
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.

Question 2

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months. What is the best action for you to take?

Accepted Answer

A)  Void the check. If it has not been cashed in 5 months, it will never be cashed. 
B)  Issue a replacement check because you assume the original check has been lost. 
C)  Wait 3 more months to give the bank more time to clear the check. 
D)  Investigate to determine why the check has not cleared. 
A)  Void the check. If it has not been cashed in 5 months, it will never be cashed. 
B)  Issue a replacement check because you assume the original check has been lost. 
C)  Wait 3 more months to give the bank more time to clear the check. 
D)  Investigate to determine why the check has not cleared.

Question 3

All of the following are true regarding the management and monitoring of cash except

Accepted Answer

A)  companies may have plenty of sales, but insufficient cash to support operations. 
B)  the cash to cash operating cycle for a manufacturer is generally shorter than that of a merchandising company. 
C)  manufacturers may experience a significant lag between the purchase of raw materials and the receipt of cash from customers. 
D)  companies should have sufficient cash to meet payments but minimize the amount of non-revenue-generating cash on hand. 
A)  companies may have plenty of sales, but insufficient cash to support operations. 
B)  the cash to cash operating cycle for a manufacturer is generally shorter than that of a merchandising company. 
C)  manufacturers may experience a significant lag between the purchase of raw materials and the receipt of cash from customers. 
D)  companies should have sufficient cash to meet payments but minimize the amount of non-revenue-generating cash on hand.

Question 4

The use of prenumbered checks is an example of

Accepted Answer

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

Question 5

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The separation of duties feature of internal control can be negated when several employees are involved in a scheme.

Accepted Answer

A) True 
 B)False

Question 8

Cash is defined by IFRS as

Accepted Answer

A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  cash on hand, demand deposits, and highly liquid investments. 
A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  cash on hand, demand deposits, and highly liquid investments.

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following would be added to the balance per books on a bank reconciliation?

Accepted Answer

A)  Outstanding checks. 
B)  Deposits in transit. 
C)  Notes collected by the bank. 
D)  NSF check. 
A)  Outstanding checks. 
B)  Deposits in transit. 
C)  Notes collected by the bank. 
D)  NSF check.

Question 11

Each of the following is a feature of internal control except

Accepted Answer

A)  an extensive marketing plan. 
B)  bonding of employees. 
C)  separation of duties. 
D)  recording of all transactions. 
A)  an extensive marketing plan. 
B)  bonding of employees. 
C)  separation of duties. 
D)  recording of all transactions.

Question 12

Schwinn Company assembled the following information in completing its March bank reconciliation:   As a result of this reconciliation, Schwinn will

Accepted Answer

A)  reduce its cash account by $1,900. 
B)  reduce its cash account by $100. 
C)  increase its cash account by $220. 
D)  reduce its cash account by $420. 
A)  reduce its cash account by $1,900. 
B)  reduce its cash account by $100. 
C)  increase its cash account by $220. 
D)  reduce its cash account by $420.

Question 13

A check returned by the bank marked "NSF" means

Accepted Answer

A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled out. 
D)  not sufficient funds. 
A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled out. 
D)  not sufficient funds.

Question 14

Identify the internal control procedures applicable to cash disbursements followed by Tolan Company in each of the following cases.
1. Company checks are pre-numbered.
2. Only the treasurer is authorized to sign checks.
3. Bonding of employees that handle cash.
4. Blank checks are stored in a locked safe.
5. The bookkeeper, not the treasurer, records cash disbursements.

Accepted Answer

1. Documentation procedures
2.

Question 15

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 16

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

Accepted Answer

A) True 
 B)False

Question 17

Which one of the following sections would not appear on a cash budget?

Accepted Answer

A)  Cash receipts. 
B)  Financing needed. 
C)  Investing. 
D)  Cash disbursements. 
A)  Cash receipts. 
B)  Financing needed. 
C)  Investing. 
D)  Cash disbursements.

Question 18

Which of the following bank reconciliation items would not result in an adjusting entry?

Accepted Answer

A)  Service charge. 
B)  Deposits in transit. 
C)  NSF check of customer. 
D)  Collection of a note by the bank. 
A)  Service charge. 
B)  Deposits in transit. 
C)  NSF check of customer. 
D)  Collection of a note by the bank.

Question 19

All of the following are true regarding bank statements except

Accepted Answer

A)  the bank statement will show a credit for deposits received from a company. 
B)  the bank statement balance will always agree with the company recorded balance. 
C)  the bank statement is a copy of the bank's records sent to the customer for periodic review. 
D)  the bank statement will show a debit if a check is paid for a company issuing the check. 
A)  the bank statement will show a credit for deposits received from a company. 
B)  the bank statement balance will always agree with the company recorded balance. 
C)  the bank statement is a copy of the bank's records sent to the customer for periodic review. 
D)  the bank statement will show a debit if a check is paid for a company issuing the check.

Question 20

Internal controls are concerned with

Accepted Answer

A)  only manual systems of accounting. 
B)  the extent of government regulations. 
C)  safeguarding assets. 
D)  preparing income tax returns. 
A)  only manual systems of accounting. 
B)  the extent of government regulations. 
C)  safeguarding assets. 
D)  preparing income tax returns.

Sarbanes Oxley applies to

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months. What is the best action for you to take?

All of the following are true regarding the management and monitoring of cash except

The use of prenumbered checks is an example of

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

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

The separation of duties feature of internal control can be negated when several employees are involved in a scheme.

Cash is defined by IFRS as

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

Which of the following would be added to the balance per books on a bank reconciliation?

Each of the following is a feature of internal control except

Schwinn Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Schwinn will

A check returned by the bank marked "NSF" means

A system of internal control

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

Which one of the following sections would not appear on a cash budget?

Which of the following bank reconciliation items would not result in an adjusting entry?

All of the following are true regarding bank statements except

Internal controls are concerned with

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

Time Value of Money

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Exam 7: Fraud, Internal Control, and Cash

Sarbanes Oxley applies to

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months. What is the best action for you to take?

All of the following are true regarding the management and monitoring of cash except

The use of prenumbered checks is an example of

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

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

The separation of duties feature of internal control can be negated when several employees are involved in a scheme.

Cash is defined by IFRS as

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

Which of the following would be added to the balance per books on a bank reconciliation?

Each of the following is a feature of internal control except

Schwinn Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Schwinn will

A check returned by the bank marked "NSF" means

A system of internal control

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

Which one of the following sections would not appear on a cash budget?

Which of the following bank reconciliation items would not result in an adjusting entry?

All of the following are true regarding bank statements except

Internal controls are concerned with

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

Time Value of Money

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