Question 1

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

Accepted Answer

A)  Preparing a record of all cash collections immediately upon receipt 
B)  Providing copies of written receipts to customers 
C)  Depositing cash receipts in a bank on a timely basis 
D)  Marking supporting documents Paid when checks are signed 
A)  Preparing a record of all cash collections immediately upon receipt 
B)  Providing copies of written receipts to customers 
C)  Depositing cash receipts in a bank on a timely basis 
D)  Marking supporting documents Paid when checks are signed D

Question 2

In the reconciliation of the June bank statement,a deposit made on June 30 did not appear on the June bank statement.How is this deposit in transit shown on the bank reconciliation?

Accepted Answer

A)  Subtracted from the unadjusted book balance. 
B)  Added to the unadjusted book balance. 
C)  Subtracted from the unadjusted bank balance. 
D)  Added to the unadjusted bank balance. 
A)  Subtracted from the unadjusted book balance. 
B)  Added to the unadjusted book balance. 
C)  Subtracted from the unadjusted bank balance. 
D)  Added to the unadjusted bank balance. D

Question 3

Most audits result in unqualified audit opinions.

Accepted Answer

A) True 
 B)False  True

Question 4

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

Accepted Answer

A) True 
 B)False

Question 5

A well-designed system of internal controls will eliminate all fraud.

Accepted Answer

A) True 
 B)False

Question 6

A bank reconciliation normally begins with the ending cash balance shown on the bank statement and reconciles it to the unadjusted cash account balance on the company's books.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a typical document associated with a bank checking account?

Accepted Answer

A)  Signature card 
B)  Bank statement 
C)  Cash register tape 
D)  Deposit ticket 
A)  Signature card 
B)  Bank statement 
C)  Cash register tape 
D)  Deposit ticket

Question 8

An error is considered material if it would trigger an IRS audit.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not one of the nine features of an internal control system?

Accepted Answer

A)  Establishment of clear lines of authority 
B)  Having employees covered by a fidelity bond 
C)  Requiring regular vacations for certain employees 
D)  Customer service comment cards 
A)  Establishment of clear lines of authority 
B)  Having employees covered by a fidelity bond 
C)  Requiring regular vacations for certain employees 
D)  Customer service comment cards

Question 10

Which of the following is not a common internal control procedure over cash payments?

Accepted Answer

A)  A receipt should be provided to each cash customer 
B)  Checks should be properly authorized with approval signatures 
C)  All checks should be prenumbered 
D)  Voided checks should be defaced and retained 
A)  A receipt should be provided to each cash customer 
B)  Checks should be properly authorized with approval signatures 
C)  All checks should be prenumbered 
D)  Voided checks should be defaced and retained

Question 11

Which of the following is not an example of a common control activity?

Accepted Answer

A)  Required absences 
B)  Collusion 
C)  Procedures manual 
D)  Use of prenumbered documents 
A)  Required absences 
B)  Collusion 
C)  Procedures manual 
D)  Use of prenumbered documents

Question 12

At the time petty cash funds are disbursed,there is no effect on the financial statements.

Accepted Answer

A) True 
 B)False

Question 13

Typical adjustments to the unadjusted bank balance on a bank reconciliation include deposits in transit and outstanding checks.

Accepted Answer

A) True 
 B)False

Question 14

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

Accepted Answer

A)  $2,200 
B)  $2,000 
C)  $2,700 
D)  $2,400 
A)  $2,200 
B)  $2,000 
C)  $2,700 
D)  $2,400

Question 15

Which of the following statements concerning internal controls is true?

Accepted Answer

A)  Internal administrative controls are designed to limit the amount of funds spent on investments. 
B)  Strong internal controls provide reasonable assurance that the objectives of a company will be accomplished. 
C)  Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. 
D)  The control procedure, segregation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company. 
A)  Internal administrative controls are designed to limit the amount of funds spent on investments. 
B)  Strong internal controls provide reasonable assurance that the objectives of a company will be accomplished. 
C)  Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. 
D)  The control procedure, segregation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company.

Question 16

Which of the following is not a motive for the embezzlement of cash by employees?

Accepted Answer

A)  Cash is the common unit of measurement 
B)  Ownership of cash is difficult to prove 
C)  Cash has universal appeal 
D)  Small quantities of high-denomination currency can represent significant value 
A)  Cash is the common unit of measurement 
B)  Ownership of cash is difficult to prove 
C)  Cash has universal appeal 
D)  Small quantities of high-denomination currency can represent significant value

Question 17

Which of the following is an internal control procedure used to safeguard a company's assets?

Accepted Answer

A)  Depositing cash receipts in a bank on a timely basis 
B)  Segregation of duties 
C)  Preparing a bank reconciliation 
D)  All of these answer choices are correct 
A)  Depositing cash receipts in a bank on a timely basis 
B)  Segregation of duties 
C)  Preparing a bank reconciliation 
D)  All of these answer choices are correct

Question 18

Preparing a bank reconciliation is a control activity.

Accepted Answer

A) True 
 B)False

Question 19

How will a certified check be shown on a company's bank reconciliation?

Accepted Answer

A)  As a deduction to the company's unadjusted book balance. 
B)  As an increase to the bank's unadjusted bank balance. 
C)  As a deduction to the bank's unadjusted bank balance. 
D)  There is no adjustment when preparing the bank reconciliation. 
A)  As a deduction to the company's unadjusted book balance. 
B)  As an increase to the bank's unadjusted bank balance. 
C)  As a deduction to the bank's unadjusted bank balance. 
D)  There is no adjustment when preparing the bank reconciliation.

Question 20

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

Accepted Answer

A) True 
 B)False

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

In the reconciliation of the June bank statement,a deposit made on June 30 did not appear on the June bank statement.How is this deposit in transit shown on the bank reconciliation?

Most audits result in unqualified audit opinions.

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

A well-designed system of internal controls will eliminate all fraud.

A bank reconciliation normally begins with the ending cash balance shown on the bank statement and reconciles it to the unadjusted cash account balance on the company's books.

Which of the following is not a typical document associated with a bank checking account?

An error is considered material if it would trigger an IRS audit.

Which of the following is not one of the nine features of an internal control system?

Which of the following is not a common internal control procedure over cash payments?

Which of the following is not an example of a common control activity?

At the time petty cash funds are disbursed,there is no effect on the financial statements.

Typical adjustments to the unadjusted bank balance on a bank reconciliation include deposits in transit and outstanding checks.

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

Which of the following statements concerning internal controls is true?

Which of the following is not a motive for the embezzlement of cash by employees?

Which of the following is an internal control procedure used to safeguard a company's assets?

Preparing a bank reconciliation is a control activity.

How will a certified check be shown on a company's bank reconciliation?

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

An Introduction to Accounting

Accounting for Accruals

Accounting for Deferrals

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships, partnerships, and Corporations

Statement of Cash Flows

The Double-Entry Accounting System

Financial Statement Analysis

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Exam 6: Internal Control and Accounting for Cash

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

In the reconciliation of the June bank statement,a deposit made on June 30 did not appear on the June bank statement.How is this deposit in transit shown on the bank reconciliation?

Most audits result in unqualified audit opinions.

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

A well-designed system of internal controls will eliminate all fraud.

A bank reconciliation normally begins with the ending cash balance shown on the bank statement and reconciles it to the unadjusted cash account balance on the company's books.

Which of the following is not a typical document associated with a bank checking account?

An error is considered material if it would trigger an IRS audit.

Which of the following is not one of the nine features of an internal control system?

Which of the following is not a common internal control procedure over cash payments?

Which of the following is not an example of a common control activity?

At the time petty cash funds are disbursed,there is no effect on the financial statements.

Typical adjustments to the unadjusted bank balance on a bank reconciliation include deposits in transit and outstanding checks.

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

Which of the following statements concerning internal controls is true?

Which of the following is not a motive for the embezzlement of cash by employees?

Which of the following is an internal control procedure used to safeguard a company's assets?

Preparing a bank reconciliation is a control activity.

How will a certified check be shown on a company's bank reconciliation?

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

An Introduction to Accounting

Accounting for Accruals

Accounting for Deferrals

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships, partnerships, and Corporations

Statement of Cash Flows

The Double-Entry Accounting System

Financial Statement Analysis

Filters