Exam 8: Internal Control and Cash

In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the operations accountant is responsible for safeguarding and maintaining the pipe inventory and also to record inventory transactions into the journal. A separate accounting clerk keeps records of the cash receipts and payments. The treasurer signs cheques and approves contracts.

Please refer to the following bank reconciliation: No journal entries are required for the reconciling items on the bank side because:

A company makes a legitimate, properly authorised payment to a supplier. The accountant changes the date of the transaction to shift it to a later time period. Because the transaction is legitimate, this action would not be considered unethical.

If an accountant takes an action that is deliberately designed to improve the company's financial results, it would be considered unethical if:

Mandatory vacations and job rotation improve internal control.

Which of the following is NOT one of the benefits provided by internal control?

A petty cash fund was established with a $400 balance. It currently has cash of $9 and petty cash slips as shown below. The journal entry to replenish the account would be which of the following?

The bank recorded a $2 000 deposit as $200. How would this information be included on the bank reconciliation?

When a cheque is issued, the party being paid the cash is referred to as the:

In the following situation, which internal control procedure needs strengthening? Hofstra Services hired a new accounting manager. He signed a contract for a new accounting information system, but his position did not specify whether he was authorized to do so or not.

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

A company cheque for payment must be signed by:

Which of the following describes the internal control procedure assignment of responsibilities?

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation?

Which of the following describes the internal control component information system?

Which of the following is NOT included in a voucher?

Which of the following should the purchasing agent NOT be able to do?

Which of the following statements describes a voucher?

In reconciling a bank statement, the bank balance is $1 000 and the chequebook balance is $1 205. Which of the following is the MOST probable reason why the chequebook balance is larger than the bank balance?

If a single person is authorised to both order goods and approve payments, the company may be defrauded in several ways. Which of the following scenarios would NOT be a possible consequence of this control weakness?