Question 1

The three main components of the fraud triangle are:

Accepted Answer

A) rationalization,opportunity and greed. 
B) opportunity,motive and lack of ethics. 
C) motive,opportunity and rationalization. 
D) none of the above. 
A) rationalization,opportunity and greed. 
B) opportunity,motive and lack of ethics. 
C) motive,opportunity and rationalization. 
D) none of the above.

Question 2

Fraudulent financial reporting:

Accepted Answer

A) involves employee overstatement of expense reimbursement requests. 
B) involves bribes and kickbacks. 
C) involves stealing assets from the company. 
D) deceives financial statement users. 
A) involves employee overstatement of expense reimbursement requests. 
B) involves bribes and kickbacks. 
C) involves stealing assets from the company. 
D) deceives financial statement users.

Question 3

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

Accepted Answer

A) debit to Cash for $200 and a credit to Interest Revenue for $200. 
B) debit to Accounts Receivable for $200 and a credit to Interest Revenue for $200. 
C) debit to Interest Revenue for $200 and credit to Cash for $200. 
D) debit to Interest Expense for $200 and credit to Prepaid Interest for $200. 
A) debit to Cash for $200 and a credit to Interest Revenue for $200. 
B) debit to Accounts Receivable for $200 and a credit to Interest Revenue for $200. 
C) debit to Interest Revenue for $200 and credit to Cash for $200. 
D) debit to Interest Expense for $200 and credit to Prepaid Interest for $200.

Question 4

Fraud is a major problem in many businesses throughout the world.

Accepted Answer

A) True 
 B)False

Question 5

When preparing a bank reconciliation,which of the following items should be added to the book balance?

Accepted Answer

A) EFT receipts 
B) Deposits in transit 
C) Collection of note receivable by bank 
D) Both EFT receipts and collection of note receivable 
A) EFT receipts 
B) Deposits in transit 
C) Collection of note receivable by bank 
D) Both EFT receipts and collection of note receivable

Question 6

Smart hiring practices and separation of duties is part of the control environment.

Accepted Answer

A) True 
 B)False

Question 7

Internal controls are designed to accomplish five objectives that include compliance with legal requirements,promote operational efficiency,safeguard assets,encourage employees to follow company policy and:

Accepted Answer

A) prevent misappropriation of assets. 
B) prevent collusion. 
C) prevent fraud. 
D) ensure accurate,reliable accounting records. 
A) prevent misappropriation of assets. 
B) prevent collusion. 
C) prevent fraud. 
D) ensure accurate,reliable accounting records.

Question 8

The Sarbanes-Oxley Act created the American Institute of Certified Public Accountants to oversee the audits of public companies.

Accepted Answer

A) True 
 B)False

Question 9

The treasurer is solely responsible for the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 10

The person to whom a check is paid is referred to as the maker.

Accepted Answer

A) True 
 B)False

Question 11

Which statement about internal controls is FALSE?

Accepted Answer

A) Public companies must issue a report on internal control with their financial statements. 
B) Outside auditors much evaluate and report on the soundness of a company's internal controls. 
C) The Sarbanes-Oxley Act requires public companies to issue a report on internal control. 
D) Public companies do not have to evaluate the effectiveness of internal controls. 
A) Public companies must issue a report on internal control with their financial statements. 
B) Outside auditors much evaluate and report on the soundness of a company's internal controls. 
C) The Sarbanes-Oxley Act requires public companies to issue a report on internal control. 
D) Public companies do not have to evaluate the effectiveness of internal controls.

Question 12

Jim's Company has the following items: cash in a checking account,$1,000; cash in a savings account,$4,000; high-grade government securities due in one month,$3,586; accounts receivable,$3,000; cash pledged as collateral for a loan,$10,000.How much should appear as Restricted Cash on the balance sheet?

Accepted Answer

A) $5,000 
B) $10,000 
C) $15,000 
D) $18,586 
A) $5,000 
B) $10,000 
C) $15,000 
D) $18,586

Question 13

Which statement is FALSE?

Accepted Answer

A) Sales to customers should be approved by a separate credit department. 
B) Purchases on credit should be approved by a separate purchasing department. 
C) Transactions with a large dollar amount should be approved by the Board of Directors or top management. 
D) The firing of employees should be handled by the department where the employee works. 
A) Sales to customers should be approved by a separate credit department. 
B) Purchases on credit should be approved by a separate purchasing department. 
C) Transactions with a large dollar amount should be approved by the Board of Directors or top management. 
D) The firing of employees should be handled by the department where the employee works.

Question 14

Alpha Company has an account at First Bank.Alpha writes a check payable to Beta Company.In this transaction,Beta Company is the:

Accepted Answer

A) payee. 
B) payer. 
C) drawer. 
D) maker. 
A) payee. 
B) payer. 
C) drawer. 
D) maker.

Question 15

A receiving report:

Accepted Answer

A) identifies the need for merchandise and begins the purchasing process. 
B) identifies that the merchandise has been received and ends the purchasing process. 
C) is sent by the purchasing department to the customer who purchases the item. 
D) includes the invoice,receiving report,purchase order and purchase request. 
A) identifies the need for merchandise and begins the purchasing process. 
B) identifies that the merchandise has been received and ends the purchasing process. 
C) is sent by the purchasing department to the customer who purchases the item. 
D) includes the invoice,receiving report,purchase order and purchase request.

Question 16

If a bookkeeper mistakenly records a disbursement as $47 instead of the correct amount of $74,the error should be shown on the bank reconciliation as a:

Accepted Answer

A) $27 addition to the balance per books. 
B) $27 deduction from the balance per books. 
C) $36 addition to the balance per books. 
D) $36 deduction from the balance per books. 
A) $27 addition to the balance per books. 
B) $27 deduction from the balance per books. 
C) $36 addition to the balance per books. 
D) $36 deduction from the balance per books.

Question 17

Which of the following transactions requires a journal entry?

Accepted Answer

A) The bank charged $50 for a stop payment on a check. 
B) The bank deducted $50 from your account incorrectly. 
C) The bank collected a note receivable with interest on your behalf. 
D) A and C 
A) The bank charged $50 for a stop payment on a check. 
B) The bank deducted $50 from your account incorrectly. 
C) The bank collected a note receivable with interest on your behalf. 
D) A and C

Question 18

Which is NOT an objective of an internal control system?

Accepted Answer

A) Safeguarding of assets 
B) Compliance with company policies 
C) Compliance with legal requirements 
D) Risk assessment 
A) Safeguarding of assets 
B) Compliance with company policies 
C) Compliance with legal requirements 
D) Risk assessment

Question 19

Nichols Co.has the following information for the second quarter of 2012:
   Cost of Goods Sold is 75% of Sales; all cash
Operating expenses is 10% of Sales; all cash
   Income taxes paid:
   The minimum cash balance for any month is $10,000.
Prepare a cash budget for each month in the second quarter of 2012,showing any excess cash or any financing needed.Any interest on the financing will be deferred until the fiscal year end in December.

Accepted Answer

The answer of Nichols Co.has the following information for the...

Question 20

A compensating balance maintained for a loan increases the actual interest rate on a loan.

Accepted Answer

A) True 
 B)False

The three main components of the fraud triangle are:

Fraudulent financial reporting:

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

Fraud is a major problem in many businesses throughout the world.

When preparing a bank reconciliation,which of the following items should be added to the book balance?

Smart hiring practices and separation of duties is part of the control environment.

Internal controls are designed to accomplish five objectives that include compliance with legal requirements,promote operational efficiency,safeguard assets,encourage employees to follow company policy and:

The Sarbanes-Oxley Act created the American Institute of Certified Public Accountants to oversee the audits of public companies.

The treasurer is solely responsible for the petty cash fund.

The person to whom a check is paid is referred to as the maker.

Which statement about internal controls is FALSE?

Which statement is FALSE?

Alpha Company has an account at First Bank.Alpha writes a check payable to Beta Company.In this transaction,Beta Company is the:

A receiving report:

If a bookkeeper mistakenly records a disbursement as $47 instead of the correct amount of $74,the error should be shown on the bank reconciliation as a:

Which of the following transactions requires a journal entry?

Which is NOT an objective of an internal control system?

A compensating balance maintained for a loan increases the actual interest rate on a loan.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets,natural Resources, Intangibles

Long-Term Investments: The Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, the Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Internal Control Cash

The three main components of the fraud triangle are:

Fraudulent financial reporting:

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

Fraud is a major problem in many businesses throughout the world.

When preparing a bank reconciliation,which of the following items should be added to the book balance?

Smart hiring practices and separation of duties is part of the control environment.

Internal controls are designed to accomplish five objectives that include compliance with legal requirements,promote operational efficiency,safeguard assets,encourage employees to follow company policy and:

The Sarbanes-Oxley Act created the American Institute of Certified Public Accountants to oversee the audits of public companies.

The treasurer is solely responsible for the petty cash fund.

The person to whom a check is paid is referred to as the maker.

Which statement about internal controls is FALSE?

Which statement is FALSE?

Alpha Company has an account at First Bank.Alpha writes a check payable to Beta Company.In this transaction,Beta Company is the:

A receiving report:

If a bookkeeper mistakenly records a disbursement as $47 instead of the correct amount of $74,the error should be shown on the bank reconciliation as a:

Which of the following transactions requires a journal entry?

Which is NOT an objective of an internal control system?

A compensating balance maintained for a loan increases the actual interest rate on a loan.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets,natural Resources, Intangibles

Long-Term Investments: The Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, the Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters