Question 1

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 2

The management of Morton Company estimates that credit sales for August, September, October, and November will be $180,000, $200,000, $230,000, and $160,000, respectively. Experience has shown that collections are made as follows:   Instructions
Determine the collections from customers in October and November. Show all computations.

Accepted Answer

@#IMG-DLM& Ex. *237
The petty cash fund

Question 3

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 4

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

Accepted Answer

A)  Time lags. 
B)  Errors by the bank. 
C)  Errors by the company. 
D)  All of these answer choices are correct. 
A)  Time lags. 
B)  Errors by the bank. 
C)  Errors by the company. 
D)  All of these answer choices are correct.

Question 5

At August 31 Kiner Company has this bank information: cash balance per bank $9,450; outstanding checks $762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2014.

Accepted Answer

The answer of At August 31 Kiner Company has this...

Question 6

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 7

What is the rationale for the internal control principle, segregation of duties?

Accepted Answer

A)  History has shown that employees are generally dishonest and thus cannot be entrusted with performing related duties. 
B)  The work of one employee should, without duplication of effort, provide a reliable basis for evaluating the work of another employee. 
C)  Control is most effective when only one person is responsible for a give task. 
D)  Segregation of duties causes companies to hire more employees and thus it supports the economy. 
A)  History has shown that employees are generally dishonest and thus cannot be entrusted with performing related duties. 
B)  The work of one employee should, without duplication of effort, provide a reliable basis for evaluating the work of another employee. 
C)  Control is most effective when only one person is responsible for a give task. 
D)  Segregation of duties causes companies to hire more employees and thus it supports the economy.

Question 8

In the month of November Gavin Company Inc. wrote checks in the amount of $27,750. In December, checks in the amount of $37,974 were written. In November, $25,404 of these checks were presented to the bank for payment, and $32,649 in December. What is the amount of outstanding checks at the end of December?

Accepted Answer

A)  $5,325. 
B)  $2,346. 
C)  $7,671. 
D)  $10,650. 
A)  $5,325. 
B)  $2,346. 
C)  $7,671. 
D)  $10,650.

Question 9

It is unlikely that a company would want to bond its employees who handle cash or inventory.

Accepted Answer

A) True 
 B)False

Question 10

All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act except

Accepted Answer

A)  independent outside auditors must attest to the level of internal control. 
B)  companies must develop sound internal controls over financial reporting. 
C)  companies must continually assess the functionality of internal controls. 
D)  independent outside auditors must eliminate redundant internal controls. 
A)  independent outside auditors must attest to the level of internal control. 
B)  companies must develop sound internal controls over financial reporting. 
C)  companies must continually assess the functionality of internal controls. 
D)  independent outside auditors must eliminate redundant internal controls.

Question 11

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

Accepted Answer

A)  Everyone in the organization. 
B)  An individual and his/her supervisor. 
C)  Only one individual. 
D)  The CEO. 
A)  Everyone in the organization. 
B)  An individual and his/her supervisor. 
C)  Only one individual. 
D)  The CEO.

Question 12

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

Accepted Answer

A)  establishment of responsibility is violated. 
B)  independent internal verification is violated. 
C)  documentation procedures is violated. 
D)  separation of duties is violated. 
A)  establishment of responsibility is violated. 
B)  independent internal verification is violated. 
C)  documentation procedures is violated. 
D)  separation of duties is violated.

Question 13

A debit balance in Cash Over and Short is reported as a

Accepted Answer

A)  contra asset. 
B)  miscellaneous asset. 
C)  miscellaneous expense. 
D)  miscellaneous revenue. 
A)  contra asset. 
B)  miscellaneous asset. 
C)  miscellaneous expense. 
D)  miscellaneous revenue.

Question 14

Which one of the following items would never appear on a cash budget?

Accepted Answer

A)  Office salaries expense. 
B)  Interest expense. 
C)  Depreciation expense. 
D)  Travel expense. 
A)  Office salaries expense. 
B)  Interest expense. 
C)  Depreciation expense. 
D)  Travel expense.

Question 15

The following credit sales are budgeted by Gonzalez Company:   The company's past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of April is

Accepted Answer

A)  $144,000. 
B)  $168,000. 
C)  $180,000. 
D)  $186,000. 
A)  $144,000. 
B)  $168,000. 
C)  $180,000. 
D)  $186,000.

Question 16

Which of the following is not included in the cash disbursements section of a cash budget?

Accepted Answer

A)  Payments for materials. 
B)  Payments for income taxes. 
C)  Repayments of borrowed funds. 
D)  All of these answer choices are included. 
A)  Payments for materials. 
B)  Payments for income taxes. 
C)  Repayments of borrowed funds. 
D)  All of these answer choices are included.

Question 17

In preparing a bank reconciliation, outstanding checks 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 18

What percentage of companies worldwide have experienced fraud in the last two years?

Accepted Answer

A)  1% 
B)  10% 
C)  50% 
D)  100% 
A)  1% 
B)  10% 
C)  50% 
D)  100%

Question 19

Cash restricted in use should be separately reported on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 20

Cash equivalents include money market accounts, commercial paper, and U.S. treasury bills held for ninety days or less.

Accepted Answer

A) True 
 B)False

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

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.

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

At August 31 Kiner Company has this bank information: cash balance per bank $9,450; outstanding checks $762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2014.

An adjusting entry is not required for

What is the rationale for the internal control principle, segregation of duties?

It is unlikely that a company would want to bond its employees who handle cash or inventory.

All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act except

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

A debit balance in Cash Over and Short is reported as a

Which one of the following items would never appear on a cash budget?

The following credit sales are budgeted by Gonzalez Company: The company's past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of April is

Which of the following is not included in the cash disbursements section of a cash budget?

In preparing a bank reconciliation, outstanding checks are

What percentage of companies worldwide have experienced fraud in the last two years?

Cash restricted in use should be separately reported on the balance sheet.

Cash equivalents include money market accounts, commercial paper, and U.S. treasury bills held for ninety days or less.

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

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

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.

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

At August 31 Kiner Company has this bank information: cash balance per bank $9,450; outstanding checks $762; deposits in transit $1,700; and a bank service charge $20. Determine the adjusted cash balance per bank at August 31, 2014.

An adjusting entry is not required for

What is the rationale for the internal control principle, segregation of duties?

It is unlikely that a company would want to bond its employees who handle cash or inventory.

All of the following requirements about internal controls were enacted under the Sarbanes Oxley Act except

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

A debit balance in Cash Over and Short is reported as a

Which one of the following items would never appear on a cash budget?

The following credit sales are budgeted by Gonzalez Company: The company's past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of April is

Which of the following is not included in the cash disbursements section of a cash budget?

In preparing a bank reconciliation, outstanding checks are

What percentage of companies worldwide have experienced fraud in the last two years?

Cash restricted in use should be separately reported on the balance sheet.

Cash equivalents include money market accounts, commercial paper, and U.S. treasury bills held for ninety days or less.

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

Filters