Exam 8: Internal Control and Cash

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

Journal entries are required if the bank reconciliation includes outstanding checks.

External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles.

Which is the most liquid form of assets?

Which of the following is described as a system where customers send their checks directly to a post office box that belongs to a bank?

Violators of Sarbanes-Oxley Act may be sentenced to prison for making false sworn statements.

A company check for payment must be signed by:

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

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

Reducing expenses to increase operating profit is representative of:

Which of the following statements is true of the Sarbanes-Oxley Act?

A system cannot be overcome or broken into if its internal controls are properly designed and structured.

In the following situation, which internal control procedure needs strengthening? Syria Services hired a new accounting manager. He signed a contract for a new accounting information system, but his position did not specify whether he was authorized to do so or not.

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as:

Which of the following is one of the benefits provided by internal control?

Which of the following is the first step in the purchasing and payment process?

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

A check for which a maker's bank account has inadequate money to pay the check is known as:

Petty cash is accounted for by maintaining a constant balance in the petty cash account, supported by the fund, cash plus payment tickets, totaling the same amount. Such a system is known as the:

A petty cash fund was established with a $500 balance. It currently has cash of $19 and petty cash tickets as shown below. Travel expense \ 110 Office supplies \ 290 Equipment rental expense \ 80 Which of the following would be the journal entry to replenish the Petty Cash account?