Question 1

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

Accepted Answer

A) comparison 
B) reconciliation 
C) review 
D) segregation 
A) comparison 
B) reconciliation 
C) review 
D) segregation

Question 2

A bank reconciliation should be prepared

Accepted Answer

A) whenever the bank refuses to lend the company money. 
B) when an employee is suspected of fraud. 
C) to explain any difference between the depositor's balance per books and the balance per bank. 
D) by the person who is authorized to sign checks. 
A) whenever the bank refuses to lend the company money. 
B) when an employee is suspected of fraud. 
C) to explain any difference between the depositor's balance per books and the balance per bank. 
D) by the person who is authorized to sign checks.

Question 3

Cash that is restricted for a specific use should be reported separately.

Accepted Answer

A) True 
 B)False

Question 4

The control principle related to not having the same person authorize and pay for goods is known as

Accepted Answer

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

Question 5

Which of the following would not be reported on the balance sheet as a cash equivalent?

Accepted Answer

A) Money market fund 
B) Sixty-day certificate of deposit 
C) Six-month Treasury bill 
D) Money market savings certificate 
A) Money market fund 
B) Sixty-day certificate of deposit 
C) Six-month Treasury bill 
D) Money market savings certificate

Question 6

Compensating balances are a restriction on the use of a company's cash and should be

Accepted Answer

A) reported as a current asset. 
B) reported as a noncurrent asset. 
C) disclosed in the financial statements. 
D) reported as a reduction of cash. 
A) reported as a current asset. 
B) reported as a noncurrent asset. 
C) disclosed in the financial statements. 
D) reported as a reduction of cash.

Question 7

Which one of the following would not cause a bank to reduce a depositor's account?

Accepted Answer

A) Bank service charge 
B) Collection of a note receivable 
C) Wiring of funds to other locations 
D) Checks marked NSF 
A) Bank service charge 
B) Collection of a note receivable 
C) Wiring of funds to other locations 
D) Checks marked NSF

Question 8

The fraud triangle 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.
IFRS 
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.
IFRS

Question 9

Which one of the following items would not be considered cash?

Accepted Answer

A) Coins 
B) Money orders 
C) Currency 
D) Postdated checks 
A) Coins 
B) Money orders 
C) Currency 
D) Postdated checks

Question 10

All of the following would involve a debit memorandum except

Accepted Answer

A) a bank service charge. 
B) an NSF check. 
C) the cost of printing checks. 
D) interest earned. 
A) a bank service charge. 
B) an NSF check. 
C) the cost of printing checks. 
D) interest earned.

Question 11

Replenishing the petty cash fund requires

Accepted Answer

A) a debit to Cash. 
B) a credit to Petty Cash. 
C) debits to various expense accounts. 
D) no accounting entry. 
A) a debit to Cash. 
B) a credit to Petty Cash. 
C) debits to various expense accounts. 
D) no accounting entry.

Question 12

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November.$24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November.What was the amount of outstanding checks on November 30?

Accepted Answer

A) $645 
B) $1,260 
C) $1,905 
D) $2,355 
A) $645 
B) $1,260 
C) $1,905 
D) $2,355

Question 13

Firms use physical controls primarily to safeguard their assets.

Accepted Answer

A) True 
 B)False

Question 14

Tangible frauds include

Accepted Answer

A) asset misappropriation. 
B) false pretenses. 
C) counterfeiting. 
D) all of the above.
IFRS 
A) asset misappropriation. 
B) false pretenses. 
C) counterfeiting. 
D) all of the above.
IFRS

Question 15

When opening a bank checking account, a signature card

Accepted Answer

A) indicates to whom money is to be paid. 
B) indicates each person authorized to sign checks on the account. 
C) is attached to all pre-printed checks. 
D) is required only when dealing with an out-of-state bank. 
A) indicates to whom money is to be paid. 
B) indicates each person authorized to sign checks on the account. 
C) is attached to all pre-printed checks. 
D) is required only when dealing with an out-of-state bank.

Question 16

A petty cash fund should not be used for

Accepted Answer

A) postage due. 
B) loans to the petty cash custodian. 
C) taxi fares. 
D) customer lunches. 
A) postage due. 
B) loans to the petty cash custodian. 
C) taxi fares. 
D) customer lunches.

Question 17

In order to prevent a transaction from being recorded more than once, a company should maintain more than one book of original entry.

Accepted Answer

A) True 
 B)False

Question 18

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

Accepted Answer

A) True 
 B)False

Question 19

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

Accepted Answer

A) True 
 B)False

Question 20

The cash account shows a balance of $40,000 before reconciliation.The bank statement does not include a deposit of $9,200 made on the last day of the month.The bank
Statement shows a collection by the bank of $3,960 and a customer's check for $1,300 was returned because it was NSF.A customer's check for $1,380 was recorded on the books as $1,920, and a check written for $318 was recorded as $390.The correct balance in the cash account was

Accepted Answer

A) $42,048. 
B) $42,192. 
C) $43,128. 
D) $51,392. 
A) $42,048. 
B) $42,192. 
C) $43,128. 
D) $51,392.

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

A bank reconciliation should be prepared

Cash that is restricted for a specific use should be reported separately.

The control principle related to not having the same person authorize and pay for goods is known as

Which of the following would not be reported on the balance sheet as a cash equivalent?

Compensating balances are a restriction on the use of a company's cash and should be

Which one of the following would not cause a bank to reduce a depositor's account?

The fraud triangle applies to

Which one of the following items would not be considered cash?

All of the following would involve a debit memorandum except

Replenishing the petty cash fund requires

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November.$24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November.What was the amount of outstanding checks on November 30?

Firms use physical controls primarily to safeguard their assets.

Tangible frauds include

When opening a bank checking account, a signature card

A petty cash fund should not be used for

In order to prevent a transaction from being recorded more than once, a company should maintain more than one book of original entry.

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources and Intangible Assets

Liabilities

Corporations: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters

Exam 7: Fraud, Internal Control and Cash

The independent internal verification principle involves each of the following except the ______________ of data prepared by other employees.

A bank reconciliation should be prepared

Cash that is restricted for a specific use should be reported separately.

The control principle related to not having the same person authorize and pay for goods is known as

Which of the following would not be reported on the balance sheet as a cash equivalent?

Compensating balances are a restriction on the use of a company's cash and should be

Which one of the following would not cause a bank to reduce a depositor's account?

The fraud triangle applies to

Which one of the following items would not be considered cash?

All of the following would involve a debit memorandum except

Replenishing the petty cash fund requires

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November.$24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November.What was the amount of outstanding checks on November 30?

Firms use physical controls primarily to safeguard their assets.

Tangible frauds include

When opening a bank checking account, a signature card

A petty cash fund should not be used for

In order to prevent a transaction from being recorded more than once, a company should maintain more than one book of original entry.

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by an employee who has no other responsibilities pertaining to cash.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources and Intangible Assets

Liabilities

Corporations: Organisations, Stock Transactions and Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Time Value of Money

Payroll Accounting

Other Significant Liabilities

Filters