Exam 8: Internal Control and Cash

Internal auditors evaluate company controls to ensure the accuracy of financial statements.

Cash is the most liquid of all company assets.

Which of the following is a security procedure designed for e- commerce?

Internal control is the organisational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policy, promote operational efficiency, and ensure accurate and reliable accounting records.

Which of the following items is NOT required to be examined by the controller or treasurer before signing a cheque?

Around the end of the year, an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of sales, and thus a higher profit. This action would be considered unethical because it is not a legitimate business transaction.

Which of the following describes the internal control procedure documents and records?

Which of the following items found on a bank reconciliation does NOT require an adjusting entry?

A point- of- sale terminal (cash register)provides control over cash in the form of a tape record of sales which is compared to the count of the drawer.

Which of the following would be included in a journal to record a dishonoured cheque?

The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation?

Internal and external auditors are part of which of the following components of internal control?

Which of the following is the last step in the daily control over cash receipts by mail?

If the bank reconciliation includes interest revenue, a journal entry is required which debits Cash and credits Interest revenue.

An outstanding cheque is a cheque issued by the company and recorded on its books, but not yet paid by its bank.

Before signing a cheque, the controller or the treasurer should examine the purchase order, the invoice, and the receiving report to determine that the company received the goods and that the company is paying only for the goods received.

In a bank reconciliation, a deposit in transit will be shown on the bank side of the reconciliation.

'Two- factor authentication' involves logging into a computer system with a user ID and a password.

A document authorising a cash payment is a(n):

Which of the following statements describes an invoice from a supplier?