Question 1

Companies that must comply with the requirements of the Sarbanes-Oxley Act (SOX)include all:

Accepted Answer

A)  U.S. companies. 
B)  companies that trade on U.S. stock exchanges. 
C)  U.S. companies that trade on U.S. stock exchanges. 
D)  foreign companies that trade on U.S. stock exchanges. 
A)  U.S. companies. 
B)  companies that trade on U.S. stock exchanges. 
C)  U.S. companies that trade on U.S. stock exchanges. 
D)  foreign companies that trade on U.S. stock exchanges.

Question 2

A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

Accepted Answer

A) deduct the deposit from the bank statement balance. 
B) send the bank a debit memorandum 
C) deduct the deposit from the September 30 book balance and add it to the October 1 book balance. 
D) add the deposit to the end cash balance per bank statement. 
A) deduct the deposit from the bank statement balance. 
B) send the bank a debit memorandum 
C) deduct the deposit from the September 30 book balance and add it to the October 1 book balance. 
D) add the deposit to the end cash balance per bank statement.

Question 3

Cash sales rung up by cashiers totaled $117,000.Cash in the drawer was counted and found to be $119,000.The journal entry to record the day's sales would include a:

Accepted Answer

A)  debit to Cash for $117,000. 
B)  credit to Cash Overage for $2,000. 
C)  credit to Sales Revenue for $119,000. 
D)  debit to Sales Revenue for $117,000. 
A)  debit to Cash for $117,000. 
B)  credit to Cash Overage for $2,000. 
C)  credit to Sales Revenue for $119,000. 
D)  debit to Sales Revenue for $117,000.

Question 4

When a petty cash fund is in use:

Accepted Answer

A) expenses paid with petty cash are recorded when the fund is replenished. 
B) Petty Cash is debited when funds are replenished. 
C) Petty Cash is credited when funds are replenished. 
D) expenses are not recorded. 
A) expenses paid with petty cash are recorded when the fund is replenished. 
B) Petty Cash is debited when funds are replenished. 
C) Petty Cash is credited when funds are replenished. 
D) expenses are not recorded.

Question 5

When duties are properly segregated,the accounting department should compare the cash in the register with the cash count sheet.

Accepted Answer

A) True 
 B)False

Question 6

Which amount should be reported as cash on the balance sheet?

Accepted Answer

A)  The ending cash balance per the bank statement 
B)  The beginning cash balance per the bank statement 
C)  The up-to-date ending cash balance per the bank reconciliation 
D)  The ending cash balance per the books 
A)  The ending cash balance per the bank statement 
B)  The beginning cash balance per the bank statement 
C)  The up-to-date ending cash balance per the bank reconciliation 
D)  The ending cash balance per the books

Question 7

Choose the appropriate letter to match the term and the definition.There are more definitions than terms.
Term
1.____ Fraud
2.____ Imprest System
3.____ Internal Control
4.____ Loan Covenants
5.____ Sarbanes-Oxley Act (SOX)
6.____ Segregation of Duties
7.____ Voucher System
Definition
A.A process for approving and documenting all purchases and payments on account.
B.A process that controls the amount paid to others by limiting the total amount of money available for making payments to others.
C.A set of regulations passed by Congress in 2002 in an attempt to improve financial reporting and restore investor confidence.
D.Actions taken to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.
E.An attempt to deceive others for personal gain.
F.An internal control designed into the accounting system to prevent an employee from making a mistake or committing a dishonest act as part of one assigned duty and then also covering it up through another assigned duty.
G.An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual.
H.Another name for bounced checks.They arise when the check writer (your customer)does not have sufficient funds to cover the amount of the check.
I.Money or any instrument that banks will accept for deposit and immediately credit to a company's account.
J.Not available for general use but rather restricted for a specific purpose.
K.Short-term,highly liquid investments purchased within three months of maturity.
L.Terms of a loan agreement that if broken,entitle the lender to renegotiate loan terms or force repayment.

Accepted Answer

1.E
2.B
3.

Question 8

Which of the following statements concerning a voucher is not correct?

Accepted Answer

A)  The voucher consists of the purchase requisition, the purchase order, the receiving report, and the invoice. 
B)  The voucher is marked "paid" so that it cannot be accidentally or intentionally resubmitted for duplicate payment 
C)  The voucher must be prepared before the goods or services are ordered. 
D)  After the voucher is prepared, the company processes a check or electronic funds transfer to pay for the items purchased and received. 
A)  The voucher consists of the purchase requisition, the purchase order, the receiving report, and the invoice. 
B)  The voucher is marked "paid" so that it cannot be accidentally or intentionally resubmitted for duplicate payment 
C)  The voucher must be prepared before the goods or services are ordered. 
D)  After the voucher is prepared, the company processes a check or electronic funds transfer to pay for the items purchased and received.

Question 9

Which of the following is not a category of employee fraud?

Accepted Answer

A)  Corruption 
B)  Asset misappropriation 
C)  Financial statement fraud 
D)  Internal controls 
A)  Corruption 
B)  Asset misappropriation 
C)  Financial statement fraud 
D)  Internal controls

Question 10

Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

Accepted Answer

A)  Segregate duties 
B)  Establish responsibilities 
C)  Independently verify 
D)  Restrict access 
A)  Segregate duties 
B)  Establish responsibilities 
C)  Independently verify 
D)  Restrict access

Question 11

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Accepted Answer

A) True 
 B)False

Question 12

Restricted cash is reported:

Accepted Answer

A)  separately as an asset on the balance sheet 
B)  together with cash and cash equivalents on the balance sheet 
C)  separately under stockholders' equity on the balance sheet 
D)  together with cash and cash equivalents on the income statement 
A)  separately as an asset on the balance sheet 
B)  together with cash and cash equivalents on the balance sheet 
C)  separately under stockholders' equity on the balance sheet 
D)  together with cash and cash equivalents on the income statement

Question 13

Describe each of the five components of an internal control system.

Accepted Answer

Most organizations use the following con

Question 14

Which of the following is not a change introduced by the Sarbanes-Oxley Act?

Accepted Answer

A)  Management evaluate and report on the effectiveness of internal control over financial reporting. 
B)  Publically traded companies must have their financial statements audited. 
C)  The company's board of directors is required to establish an audit committee comprised of independent directors. 
D)  Public companies must have tip lines that allow employees to secretly submit concerns about questionable accounting or auditing practices. 
A)  Management evaluate and report on the effectiveness of internal control over financial reporting. 
B)  Publically traded companies must have their financial statements audited. 
C)  The company's board of directors is required to establish an audit committee comprised of independent directors. 
D)  Public companies must have tip lines that allow employees to secretly submit concerns about questionable accounting or auditing practices.

Question 15

When the petty cash fund is replenished:?

Accepted Answer

A) Cash is debited. 
B) Petty Cash is credited. 
C) Petty Cash is debited. 
D) Appropriate expense accounts are debited. 
A) Cash is debited. 
B) Petty Cash is credited. 
C) Petty Cash is debited. 
D) Appropriate expense accounts are debited.

Question 16

The main purposes of internal controls include all of the following except:

Accepted Answer

A)  prevention of error, theft, and fraud. 
B)  promotion of operational efficiency. 
C)  ensuring compliance with laws and regulations. 
D)  providing more favorable financial information. 
A)  prevention of error, theft, and fraud. 
B)  promotion of operational efficiency. 
C)  ensuring compliance with laws and regulations. 
D)  providing more favorable financial information.

Question 17

If a company hires an auditor to check that the work done by others within the company is supported by documentation,it is doing so under the principle of control activities referred to as:

Accepted Answer

A)  independent verification. 
B)  segregation of duties. 
C)  restrict access. 
D)  document procedures. 
A)  independent verification. 
B)  segregation of duties. 
C)  restrict access. 
D)  document procedures.

Question 18

Which of the following is not an example of internal control?

Accepted Answer

A)  Use of passwords to restrict access to computer systems 
B)  Bonding employees 
C)  Periodic bank reconciliations 
D)  Customer satisfaction surveys 
A)  Use of passwords to restrict access to computer systems 
B)  Bonding employees 
C)  Periodic bank reconciliations 
D)  Customer satisfaction surveys

Question 19

Mason Company gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation:
  
-Use the information above to answer the following question.The up-to-date ending cash balance on October 31 is:

Accepted Answer

A)  $3,970 
B)  $4,145 
C)  $2,645 
D)  $2,295 
A)  $3,970 
B)  $4,145 
C)  $2,645 
D)  $2,295

Question 20

If a cashier rang up sales totaling $4,000,but had only $3,997 to deposit,which journal entry would be recorded? A debit to:

Accepted Answer

A)  Cash of $3,997 and Cash Shortage of $3 and a credit to Sales Revenue of $4,000. 
B)  Sales of $4,000 and Cash Shortage of $3 and a credit to Cash of $3,997. 
C)  Cash of $3,997 and a credit to Cash Shortage of $3 and Sales Revenue of $4,000. 
D)  Cash of $3,997 and Cash Shortage of $3 and a credit to Unearned Revenue of $4,000. 
A)  Cash of $3,997 and Cash Shortage of $3 and a credit to Sales Revenue of $4,000. 
B)  Sales of $4,000 and Cash Shortage of $3 and a credit to Cash of $3,997. 
C)  Cash of $3,997 and a credit to Cash Shortage of $3 and Sales Revenue of $4,000. 
D)  Cash of $3,997 and Cash Shortage of $3 and a credit to Unearned Revenue of $4,000.

Companies that must comply with the requirements of the Sarbanes-Oxley Act (SOX)include all:

A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

Cash sales rung up by cashiers totaled $117,000.Cash in the drawer was counted and found to be $119,000.The journal entry to record the day's sales would include a:

When a petty cash fund is in use:

When duties are properly segregated,the accounting department should compare the cash in the register with the cash count sheet.

Which amount should be reported as cash on the balance sheet?

Which of the following statements concerning a voucher is not correct?

Which of the following is not a category of employee fraud?

Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Restricted cash is reported:

Describe each of the five components of an internal control system.

Which of the following is not a change introduced by the Sarbanes-Oxley Act?

When the petty cash fund is replenished:?

The main purposes of internal controls include all of the following except:

If a company hires an auditor to check that the work done by others within the company is supported by documentation,it is doing so under the principle of control activities referred to as:

Which of the following is not an example of internal control?

Mason Company gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation: -Use the information above to answer the following question.The up-to-date ending cash balance on October 31 is:

If a cashier rang up sales totaling $4,000,but had only $3,997 to deposit,which journal entry would be recorded? A debit to:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 5: Fraud, Internal Control, and Cash

Companies that must comply with the requirements of the Sarbanes-Oxley Act (SOX)include all:

A company made a bank deposit on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

Cash sales rung up by cashiers totaled $117,000.Cash in the drawer was counted and found to be $119,000.The journal entry to record the day's sales would include a:

When a petty cash fund is in use:

When duties are properly segregated,the accounting department should compare the cash in the register with the cash count sheet.

Which amount should be reported as cash on the balance sheet?

Which of the following statements concerning a voucher is not correct?

Which of the following is not a category of employee fraud?

Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Restricted cash is reported:

Describe each of the five components of an internal control system.

Which of the following is not a change introduced by the Sarbanes-Oxley Act?

When the petty cash fund is replenished:?

The main purposes of internal controls include all of the following except:

If a company hires an auditor to check that the work done by others within the company is supported by documentation,it is doing so under the principle of control activities referred to as:

Which of the following is not an example of internal control?

Mason Company gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation: -Use the information above to answer the following question.The up-to-date ending cash balance on October 31 is:

If a cashier rang up sales totaling $4,000,but had only $3,997 to deposit,which journal entry would be recorded? A debit to:

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters