Question 1

If the bank records a deposit of $900 as $90,the error should be shown on a bank reconciliation as a(n):

Accepted Answer

A) deduction from the book balance of $990. 
B) deduction from the bank balance of $990. 
C) addition to the bank balance of $810. 
D) addition to the book balance of $810. 
A) deduction from the book balance of $990. 
B) deduction from the bank balance of $990. 
C) addition to the bank balance of $810. 
D) addition to the book balance of $810.

Question 2

Smart hiring practices include:

Accepted Answer

A) background checks. 
B) clear job descriptions. 
C) proper training and supervision. 
D) all of the above. 
A) background checks. 
B) clear job descriptions. 
C) proper training and supervision. 
D) all of the above.

Question 3

Examples of a weak control environment are:

Accepted Answer

A) a CEO who overrides controls. 
B) a weak and ineffective Board of Directors. 
C) no company-wide code of ethics. 
D) all of the above. 
A) a CEO who overrides controls. 
B) a weak and ineffective Board of Directors. 
C) no company-wide code of ethics. 
D) all of the above.

Question 4

Managers can use records produced by point-of-sale terminals to check inventory levels.

Accepted Answer

A) True 
 B)False

Question 5

The entry to establish the petty cash fund is:

Accepted Answer

A) a debit to Miscellaneous Expense and a credit to Cash. 
B) a debit to Miscellaneous Expense and a credit to Petty Cash. 
C) a debit to Petty Cash and a credit to Cash. 
D) a debit to Cash and a credit to Petty Cash. 
A) a debit to Miscellaneous Expense and a credit to Cash. 
B) a debit to Miscellaneous Expense and a credit to Petty Cash. 
C) a debit to Petty Cash and a credit to Cash. 
D) a debit to Cash and a credit to Petty Cash.

Question 6

Fraudulent financial reporting is also called:

Accepted Answer

A) the fraud triangle. 
B) a misappropriation of assets. 
C) cooking the books. 
D) investigative reporting. 
A) the fraud triangle. 
B) a misappropriation of assets. 
C) cooking the books. 
D) investigative reporting.

Question 7

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

Accepted Answer

A) True 
 B)False

Question 8

Examples of internal control procedures do NOT include:

Accepted Answer

A) proper segregation of duties. 
B) adequate records. 
C) proper approvals. 
D) risk assessment. 
A) proper segregation of duties. 
B) adequate records. 
C) proper approvals. 
D) risk assessment.

Question 9

What is fraud?

Accepted Answer

A) Fraud is the intentional misrepresentation of facts made for the purpose of persuading another individual to act in a way that causes injury or damage to that individual. 
B) Fraud is the misappropriation of assets. 
C) Fraud is untruthful financial reporting. 
D) all of the above 
A) Fraud is the intentional misrepresentation of facts made for the purpose of persuading another individual to act in a way that causes injury or damage to that individual. 
B) Fraud is the misappropriation of assets. 
C) Fraud is untruthful financial reporting. 
D) all of the above

Question 10

When a company receives customers' checks by mail:

Accepted Answer

A) all incoming mail containing checks from customers should be opened by the mailroom. 
B) the mailroom sends all customer checks to the accounting department. 
C) the remittance advices go to the treasurer for deposit. 
D) the bank deposit is prepared by the mailroom. 
A) all incoming mail containing checks from customers should be opened by the mailroom. 
B) the mailroom sends all customer checks to the accounting department. 
C) the remittance advices go to the treasurer for deposit. 
D) the bank deposit is prepared by the mailroom.

Question 11

The Sarbanes-Oxley Act of 2002:

Accepted Answer

A) requires public companies to issue an internal control report. 
B) requires an outside auditor to evaluate the soundness of a public company's internal controls. 
C) requires public companies to issue a special report on the amount of collusion within a company. 
D) A and B 
A) requires public companies to issue an internal control report. 
B) requires an outside auditor to evaluate the soundness of a public company's internal controls. 
C) requires public companies to issue a special report on the amount of collusion within a company. 
D) A and B

Question 12

Seidner Store sells expensive watches.An inventory at the beginning of the day showed 40 watches in the store.10 new watches were added to the inventory during the day.The point-of-sale terminal recorded 3 watches sold.An inventory taken at the end of the day should show how many watches still in the store?

Accepted Answer

A) 27 
B) 47 
C) 53 
D) Cannot be determined from the data 
A) 27 
B) 47 
C) 53 
D) Cannot be determined from the data

Question 13

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

Accepted Answer

A) imprest system. 
B) lock-box system. 
C) phishing system. 
D) online banking system. 
A) imprest system. 
B) lock-box system. 
C) phishing system. 
D) online banking system.

Question 14

What is lapping accounts receivable?

Accepted Answer

A) A way to speed up the collection of accounts receivable by calling the debtors every week. 
B) A way to speed up the collection of accounts receivable by sending reminder notices to the debtors every week. 
C) Transferring accounts receivable to another company to collect the receivables. 
D) An embezzlement scheme whereby an employee steals customers' checks and uses devious bookkeeping procedures to conceal the theft. 
A) A way to speed up the collection of accounts receivable by calling the debtors every week. 
B) A way to speed up the collection of accounts receivable by sending reminder notices to the debtors every week. 
C) Transferring accounts receivable to another company to collect the receivables. 
D) An embezzlement scheme whereby an employee steals customers' checks and uses devious bookkeeping procedures to conceal the theft.

Question 15

An imprest petty cash fund of $400 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$41 for postage,$86 for fuel and a delivery charge of $65.How much cash should left in the fund?

Accepted Answer

A) $23 
B) $88 
C) $174 
D) $377 
A) $23 
B) $88 
C) $174 
D) $377

Question 16

The ending bank statement balance at November 30 is $6,750.The bank statement shows a service charge of $95,electronic funds receipts of $500,and a NSF check for $350.Deposits in transit total $2,050 and outstanding checks are $1,835.The balance per books at November 30 is $6,910.What is the adjusted bank balance at November 30?

Accepted Answer

A) $6,750 
B) $6,805 
C) $6,965 
D) $7,105 
A) $6,750 
B) $6,805 
C) $6,965 
D) $7,105

Question 17

The person who prepares the bank reconciliation:

Accepted Answer

A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties. 
A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties.

Question 18

Mary's Dairy has the following information available for the preparation of the cash budget for the second quarter:
   Cost of Goods Sold is 80% of Sales; all cash
Operating expenses is 8% of Sales; all cash
   Income tax rate is 30%
The minimum cash balance for any month is $10,000.
Prepare a cash budget for each month in the second quarter for this company.No additional equipment will be purchased this quarter.

Accepted Answer

The answer of Mary's Dairy has the following information available...

Question 19

Payments by EFT are an important internal control for all of the following reasons EXCEPT for:

Accepted Answer

A) the EFTs provide a record of the payments. 
B) the EFT must be authorized by an authorized official. 
C) all EFT payments are made by the cashier in the Accounting Department. 
D) before authorizing the EFT,the authorized official should study the evidence supporting the payment. 
A) the EFTs provide a record of the payments. 
B) the EFT must be authorized by an authorized official. 
C) all EFT payments are made by the cashier in the Accounting Department. 
D) before authorizing the EFT,the authorized official should study the evidence supporting the payment.

Question 20

When preparing the bank reconciliation,if the the adjusted book balance and the adjusted bank balance disagree,this may indicate:

Accepted Answer

A) an error made in preparing the bank reconciliation 
B) stealing of cash by an employee in the business 
C) fraudulent financial reporting 
D) A and B 
A) an error made in preparing the bank reconciliation 
B) stealing of cash by an employee in the business 
C) fraudulent financial reporting 
D) A and B

If the bank records a deposit of $900 as $90,the error should be shown on a bank reconciliation as a(n):

Smart hiring practices include:

Examples of a weak control environment are:

Managers can use records produced by point-of-sale terminals to check inventory levels.

The entry to establish the petty cash fund is:

Fraudulent financial reporting is also called:

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

Examples of internal control procedures do NOT include:

What is fraud?

When a company receives customers' checks by mail:

The Sarbanes-Oxley Act of 2002:

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

What is lapping accounts receivable?

An imprest petty cash fund of $400 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$41 for postage,$86 for fuel and a delivery charge of $65.How much cash should left in the fund?

The person who prepares the bank reconciliation:

Payments by EFT are an important internal control for all of the following reasons EXCEPT for:

When preparing the bank reconciliation,if the the adjusted book balance and the adjusted bank balance disagree,this may indicate:

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

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Exam 4: Internal Control Cash

If the bank records a deposit of $900 as $90,the error should be shown on a bank reconciliation as a(n):

Smart hiring practices include:

Examples of a weak control environment are:

Managers can use records produced by point-of-sale terminals to check inventory levels.

The entry to establish the petty cash fund is:

Fraudulent financial reporting is also called:

The sum of the cash in the petty cash fund and the total of the paid vouchers should equal the opening balance in the petty cash account at all times.

Examples of internal control procedures do NOT include:

What is fraud?

When a company receives customers' checks by mail:

The Sarbanes-Oxley Act of 2002:

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

What is lapping accounts receivable?

An imprest petty cash fund of $400 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$41 for postage,$86 for fuel and a delivery charge of $65.How much cash should left in the fund?

The person who prepares the bank reconciliation:

Payments by EFT are an important internal control for all of the following reasons EXCEPT for:

When preparing the bank reconciliation,if the the adjusted book balance and the adjusted bank balance disagree,this may indicate:

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