Question 1

Which of the following describes the internal control procedure separation of duties?

Accepted Answer

A) External auditors will monitor internal controls. 
B) Cashiers must not have access to accounting records. 
C) The information system is critical. 
D) Prenumber invoices and other documents. 
A) External auditors will monitor internal controls. 
B) Cashiers must not have access to accounting records. 
C) The information system is critical. 
D) Prenumber invoices and other documents.

Question 2

Which of the following is TRUE of internal control?

Accepted Answer

A) Internal controls are only necessary for large businesses. 
B) A company's outside auditor is responsible for the company's internal control system. 
C) Internal control procedures tend to diminish the importance of operational efficiency. 
D) One of the major purposes of internal control is to ensure accurate,reliable accounting records. 
A) Internal controls are only necessary for large businesses. 
B) A company's outside auditor is responsible for the company's internal control system. 
C) Internal control procedures tend to diminish the importance of operational efficiency. 
D) One of the major purposes of internal control is to ensure accurate,reliable accounting records.

Question 3

In the following situation,which internal control procedure needs strengthening? 
At Hofstra Services,the junior accountant collects cheques and cash from customers and records the transactions into the Journal.The controller approves the journal entries and bank reconciliations.The treasurer signs cheques and approves contracts.

Accepted Answer

A) Competent,reliable and ethical personnel 
B) Assignment of responsibilities 
C) Separation of duties 
D) Documents and records 
A) Competent,reliable and ethical personnel 
B) Assignment of responsibilities 
C) Separation of duties 
D) Documents and records

Question 4

Cash is the most liquid of all company assets.

Accepted Answer

A) True 
 B)False

Question 5

A malicious program that enters program code or destroys data without authorisation is an example of:

Accepted Answer

A) a password. 
B) phishing. 
C) a virus. 
D) encryption. 
A) a password. 
B) phishing. 
C) a virus. 
D) encryption.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Accepted Answer

A) bank reconciliation 
B) remittance advice 
C) bank statement 
D) deposit slip 
A) bank reconciliation 
B) remittance advice 
C) bank statement 
D) deposit slip

Question 8

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

Accepted Answer

A) A debit to Cash 
B) A credit to Petty cash 
C) A credit to Cash 
D) A credit to various expenses and assets 
A) A debit to Cash 
B) A credit to Petty cash 
C) A credit to Cash 
D) A credit to various expenses and assets

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

A 'cash short' situation exists where the cash register tape total is less than the cash on hand.

Accepted Answer

A) True 
 B)False

Question 11

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

Accepted Answer

A) True 
 B)False

Question 12

Keeping office supplies under lock and key is representative of:

Accepted Answer

A) promoting operations efficiency. 
B) following company policies. 
C) safeguarding assets. 
D) ensuring accurate,reliable accounting records. 
A) promoting operations efficiency. 
B) following company policies. 
C) safeguarding assets. 
D) ensuring accurate,reliable accounting records.

Question 13

Reducing expense to increase operating profit is representative of:

Accepted Answer

A) ensuring accurate,reliable accounting records. 
B) following company policies. 
C) safeguarding assets. 
D) promoting operational efficiency. 
A) ensuring accurate,reliable accounting records. 
B) following company policies. 
C) safeguarding assets. 
D) promoting operational efficiency.

Question 14

For good controls over cash payments,the company officer approving a payment voucher should be the same as the person who ordered the goods to ensure that the correct amount of cash is paid.

Accepted Answer

A) True 
 B)False

Question 15

As long as the same person deposits customer cheques and records the deposits into the ledger,there will be good internal control over cash receipts.

Accepted Answer

A) True 
 B)False

Question 16

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment slips)totalling the same amount.What is this system called?

Accepted Answer

A) A balanced system 
B) A control system 
C) A voucher system 
D) An imprest system 
A) A balanced system 
B) A control system 
C) A voucher system 
D) An imprest system

Question 17

A cheque of $75 deposited by a company was returned from the bank as a dishonoured cheque.How would this information be included on the bank reconciliation?

Accepted Answer

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

Question 18

The bank charged a service charge of $20.How would this information be included on the bank reconciliation?

Accepted Answer

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

Question 19

Which of the following is a general internal control,but is not classified as an 'accounting control'?

Accepted Answer

A) Authorising transactions 
B) Ensuring the accuracy of financial records 
C) Encouraging employees to follow organisational policy 
D) Safeguarding assets 
A) Authorising transactions 
B) Ensuring the accuracy of financial records 
C) Encouraging employees to follow organisational policy 
D) Safeguarding assets

Question 20

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

Accepted Answer

A) Secure inventory storage 
B) Fireproof vaults 
C) Burglar alarms 
D) Firewalls 
A) Secure inventory storage 
B) Fireproof vaults 
C) Burglar alarms 
D) Firewalls

Which of the following describes the internal control procedure separation of duties?

Which of the following is TRUE of internal control?

Cash is the most liquid of all company assets.

A malicious program that enters program code or destroys data without authorisation is an example of:

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

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

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

A 'cash short' situation exists where the cash register tape total is less than the cash on hand.

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

Keeping office supplies under lock and key is representative of:

Reducing expense to increase operating profit is representative of:

For good controls over cash payments,the company officer approving a payment voucher should be the same as the person who ordered the goods to ensure that the correct amount of cash is paid.

As long as the same person deposits customer cheques and records the deposits into the ledger,there will be good internal control over cash receipts.

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment slips)totalling the same amount.What is this system called?

A cheque of $75 deposited by a company was returned from the bank as a dishonoured cheque.How would this information be included on the bank reconciliation?

The bank charged a service charge of $20.How would this information be included on the bank reconciliation?

Which of the following is a general internal control,but is not classified as an 'accounting control'?

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

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 the internal control procedure separation of duties?

Which of the following is TRUE of internal control?

Cash is the most liquid of all company assets.

A malicious program that enters program code or destroys data without authorisation is an example of:

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

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its ledger.

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

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

A 'cash short' situation exists where the cash register tape total is less than the cash on hand.

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

Keeping office supplies under lock and key is representative of:

Reducing expense to increase operating profit is representative of:

For good controls over cash payments,the company officer approving a payment voucher should be the same as the person who ordered the goods to ensure that the correct amount of cash is paid.

As long as the same person deposits customer cheques and records the deposits into the ledger,there will be good internal control over cash receipts.

Petty cash is accounted for by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment slips)totalling the same amount.What is this system called?

A cheque of $75 deposited by a company was returned from the bank as a dishonoured cheque.How would this information be included on the bank reconciliation?

The bank charged a service charge of $20.How would this information be included on the bank reconciliation?

Which of the following is a general internal control,but is not classified as an 'accounting control'?

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

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