Question 1

Which of the following describes collusion?

Accepted Answer

A) When a company defrauds its suppliers by making false claims 
B) When bogus websites acquire passwords and account numbers fraudulently 
C) When two or more people cooperate together to defraud a company 
D) When one employee steals from a company 
A) When a company defrauds its suppliers by making false claims 
B) When bogus websites acquire passwords and account numbers fraudulently 
C) When two or more people cooperate together to defraud a company 
D) When one employee steals from a company C

Question 2

The control environment is one of the five components by which a company can achieve its internal control objectives.

Accepted Answer

A) True 
 B)False  True

Question 3

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

Accepted Answer

A) True 
 B)False  False

Question 4

A cheque was written by a business for $205,but was recorded in the cash payments journal as $502.How would this error be included on the bank reconciliation?

Accepted Answer

A) A deduction on the book side 
B) An addition on the bank side 
C) A deduction on the bank side 
D) An addition on the book side 
A) A deduction on the book side 
B) An addition on the bank side 
C) A deduction on the bank side 
D) An addition on the book side

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) A debit to Accounts payable and a credit to Cash 
B) A debit to Accounts receivable and a credit to Cash 
C) A debit to Miscellaneous expense and a credit to Cash 
D) A debit to Cash and a credit to Accounts receivable 
A) A debit to Accounts payable and a credit to Cash 
B) A debit to Accounts receivable and a credit to Cash 
C) A debit to Miscellaneous expense and a credit to Cash 
D) A debit to Cash and a credit to Accounts receivable

Question 7

Daily cash shorts and cash overs should cancel each other out over time.

Accepted Answer

A) True 
 B)False

Question 8

External auditors monitor company controls to safeguard assets and ensure that employees are following company policies.

Accepted Answer

A) True 
 B)False

Question 9

In reconciling a bank statement,the bank balance is $1 800 and the chequebook balance is $1 205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

Accepted Answer

A) The company erroneously recorded a cheque for an amount less than the actual amount. 
B) A deposit in transit was made at the end of the month. 
C) There are outstanding cheques. 
D) The bank has deducted certain amounts for bank service charges. 
A) The company erroneously recorded a cheque for an amount less than the actual amount. 
B) A deposit in transit was made at the end of the month. 
C) There are outstanding cheques. 
D) The bank has deducted certain amounts for bank service charges.

Question 10

A voucher system uses:

Accepted Answer

A) vouchers,a voucher register and a cash receipts journal. 
B) vouchers,a voucher register,an unpaid voucher file,a cheque register and a paid voucher file. 
C) vouchers,an inventory record,an unpaid voucher file and a paid voucher file. 
D) vouchers,a purchase order register,an invoice register and a cheque register. 
A) vouchers,a voucher register and a cash receipts journal. 
B) vouchers,a voucher register,an unpaid voucher file,a cheque register and a paid voucher file. 
C) vouchers,an inventory record,an unpaid voucher file and a paid voucher file. 
D) vouchers,a purchase order register,an invoice register and a cheque register.

Question 11

Which of the following is TRUE about a bank reconciliation?

Accepted Answer

A) A bank reconciliation guarantees that no errors have been made. 
B) A bank reconciliation should not be prepared by an employee who handles cash transactions. 
C) A bank reconciliation cannot be prepared with internet banking. 
D) A bank reconciliation is a financial statement. 
A) A bank reconciliation guarantees that no errors have been made. 
B) A bank reconciliation should not be prepared by an employee who handles cash transactions. 
C) A bank reconciliation cannot be prepared with internet banking. 
D) A bank reconciliation is a financial statement.

Question 12

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?

Accepted Answer

A) The bank has not cleared certain cheques. 
B) A deposit in transit was made at the end of the month. 
C) The bank has added interest revenue to the account balance. 
D) The bank received an EFT from a customer. 
A) The bank has not cleared certain cheques. 
B) A deposit in transit was made at the end of the month. 
C) The bank has added interest revenue to the account balance. 
D) The bank received an EFT from a customer.

Question 13

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

Accepted Answer

A) True 
 B)False

Question 14

A petty cash fund was established with a $500 balance.It currently has cash of $40 and petty cash tickets as shown below. $$\begin{array} { | l | l | } 
\hline \text { Travel expense } & \$ 120 \
\hline \text { Office supplies expense } & 310 \
\hline \text { Equipment rental expense } & 30\\hline
\end{array}$$ Which of the following would be the journal entry to replenish the Petty cash account?

Accepted Answer

A) debit various expenses $460;credit Petty cash $460 
B) credit Petty cash $460;debit Cash $460 
C) debit Cash $40;credit various expenses $40 
D) debit various expenses $460;credit Cash $460 
A) debit various expenses $460;credit Petty cash $460 
B) credit Petty cash $460;debit Cash $460 
C) debit Cash $40;credit various expenses $40 
D) debit various expenses $460;credit Cash $460

Question 15

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

Accepted Answer

A) It is a report showing that the goods have been received in good condition,as ordered. 
B) It is an order to purchase goods from a supplier. 
C) It is a statement from the supplier showing the goods purchased and the amount due. 
D) It is a document authorising a payment to a supplier. 
A) It is a report showing that the goods have been received in good condition,as ordered. 
B) It is an order to purchase goods from a supplier. 
C) It is a statement from the supplier showing the goods purchased and the amount due. 
D) It is a document authorising a payment to a supplier.

Question 16

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

Accepted Answer

A) Control procedures are designed to ensure that the business's goals are achieved. 
B) Only authorised users have access to various parts of the information system. 
C) The information system is the 'tone at the top' of the business. 
D) Internal auditors monitor company controls to safeguard assets and external auditors monitor the controls to ensure that the accounting records are accurate. 
A) Control procedures are designed to ensure that the business's goals are achieved. 
B) Only authorised users have access to various parts of the information system. 
C) The information system is the 'tone at the top' of the business. 
D) Internal auditors monitor company controls to safeguard assets and external auditors monitor the controls to ensure that the accounting records are accurate.

Question 17

Which of the following describes the internal control component monitoring of controls?

Accepted Answer

A) Monitoring of controls is designed to ensure that the business's goals are achieved. 
B) Monitoring of controls is the 'tone at the top' of the business. 
C) A company must identify its risks. 
D) Internal auditors monitor company controls to safeguard assets and external auditors evaluate the controls to ensure that the accounting records are accurate. 
A) Monitoring of controls is designed to ensure that the business's goals are achieved. 
B) Monitoring of controls is the 'tone at the top' of the business. 
C) A company must identify its risks. 
D) Internal auditors monitor company controls to safeguard assets and external auditors evaluate the controls to ensure that the accounting records are accurate.

Question 18

If the bank reconciliation includes a bank service charge,a journal entry is required that debits Cash and credits Miscellaneous expense.

Accepted Answer

A) True 
 B)False

Question 19

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following describes the internal control component risk assessment?

Accepted Answer

A) Internal auditors monitor company controls to safeguard assets and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) A company must identify its risks. 
C) Risk assessment is designed to ensure that the business's goals are achieved. 
D) Risk assessment is the 'tone at the top' of the business. 
A) Internal auditors monitor company controls to safeguard assets and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) A company must identify its risks. 
C) Risk assessment is designed to ensure that the business's goals are achieved. 
D) Risk assessment is the 'tone at the top' of the business.

Which of the following describes collusion?

The control environment is one of the five components by which a company can achieve its internal control objectives.

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

A cheque was written by a business for $205,but was recorded in the cash payments journal as $502.How would this error be included on the bank reconciliation?

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 would be included in a journal to record a dishonoured cheque?

Daily cash shorts and cash overs should cancel each other out over time.

External auditors monitor company controls to safeguard assets and ensure that employees are following company policies.

In reconciling a bank statement,the bank balance is $1 800 and the chequebook balance is $1 205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

A voucher system uses:

Which of the following is TRUE about a bank reconciliation?

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?

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

A petty cash fund was established with a $500 balance.It currently has cash of $40 and petty cash tickets as shown below. Travel expense \ 120 Office supplies expense 310 Equipment rental expense 30 Which of the following would be the journal entry to replenish the Petty cash account?

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

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

Which of the following describes the internal control component monitoring of controls?

If the bank reconciliation includes a bank service charge,a journal entry is required that debits Cash and credits Miscellaneous expense.

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Which of the following describes the internal control component risk assessment?

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters

Exam 8: Internal Control and Cash

Which of the following describes collusion?

The control environment is one of the five components by which a company can achieve its internal control objectives.

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

A cheque was written by a business for $205,but was recorded in the cash payments journal as $502.How would this error be included on the bank reconciliation?

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 would be included in a journal to record a dishonoured cheque?

Daily cash shorts and cash overs should cancel each other out over time.

External auditors monitor company controls to safeguard assets and ensure that employees are following company policies.

In reconciling a bank statement,the bank balance is $1 800 and the chequebook balance is $1 205.Which of the following is the MOST probable reason why the bank balance is larger than the book balance?

A voucher system uses:

Which of the following is TRUE about a bank reconciliation?

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?

A receiving report should be matched with the supplier invoice before a payment to the supplier is approved.

A petty cash fund was established with a $500 balance.It currently has cash of $40 and petty cash tickets as shown below. Travel expense \ 120 Office supplies expense 310 Equipment rental expense 30 Which of the following would be the journal entry to replenish the Petty cash account?

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

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

Which of the following describes the internal control component monitoring of controls?

If the bank reconciliation includes a bank service charge,a journal entry is required that debits Cash and credits Miscellaneous expense.

Journal entries must be made to record the reconciling items on the bank side of the reconciliation.

Which of the following describes the internal control component risk assessment?

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters