Question 1

A fidelity bond is a(n):

Accepted Answer

A) employment contract for a specified period of time. 
B) insurance policy that reimburses a company for employee theft. 
C) contract prohibiting former employees from working for a competitor. 
D) promise by a company to safeguard customers' personal information. 
A) employment contract for a specified period of time. 
B) insurance policy that reimburses a company for employee theft. 
C) contract prohibiting former employees from working for a competitor. 
D) promise by a company to safeguard customers' personal information.

Question 2

Which of the following statements about the lapping of Accounts Receivable is TRUE?

Accepted Answer

A) Lapping is a type of fraud perpetuated by an employee. 
B) Lapping is also referred to as a misappropriation of assets. 
C) Lapping arises from a weak internal control system. 
D) All of the above are true. 
A) Lapping is a type of fraud perpetuated by an employee. 
B) Lapping is also referred to as a misappropriation of assets. 
C) Lapping arises from a weak internal control system. 
D) All of the above are true.

Question 3

Managers control cash receipts and disbursements,as well as the ending cash balance,through a(n):

Accepted Answer

A) sales budget. 
B) operating budget. 
C) statement of cash flows. 
D) cash budget. 
A) sales budget. 
B) operating budget. 
C) statement of cash flows. 
D) cash budget.

Question 4

Opportunity in the fraud triangle arises from:

Accepted Answer

A) weak control environment. 
B) improper segregation of duties. 
C) improper access to assets. 
D) all of the above. 
A) weak control environment. 
B) improper segregation of duties. 
C) improper access to assets. 
D) all of the above.

Question 5

An employee states that he steals office supplies for his wife and children because "Everyone is doing it." This is an example of:

Accepted Answer

A) opportunity. 
B) motive. 
C) rationalization. 
D) understanding. 
A) opportunity. 
B) motive. 
C) rationalization. 
D) understanding.

Question 6

In a bank reconciliation,a bank service charge for printing checks is:

Accepted Answer

A) added to the bank balance. 
B) added to the book balance. 
C) deducted from the book balance. 
D) deducted from the bank balance. 
A) added to the bank balance. 
B) added to the book balance. 
C) deducted from the book balance. 
D) deducted from the bank balance.

Question 7

Internal controls for cash receipts over the counter and for cash receipts by mail are identical.

Accepted Answer

A) True 
 B)False

Question 8

The duties of purchasing goods and receiving the goods should be given to the same employee.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is a CORRECT statement regarding the bank reconciliation?

Accepted Answer

A) The bank reconciliation is part of the general ledger. 
B) Journal entries need to be made for all transactions on the bank side to get the accounts up-to-date. 
C) Journal entries need to be made for all transactions on the book side to get the accounts up-to-date. 
D) The bank reconciliation is part of the journal. 
A) The bank reconciliation is part of the general ledger. 
B) Journal entries need to be made for all transactions on the bank side to get the accounts up-to-date. 
C) Journal entries need to be made for all transactions on the book side to get the accounts up-to-date. 
D) The bank reconciliation is part of the journal.

Question 10

Another term for a "hot check" is:

Accepted Answer

A) electronic check. 
B) outstanding check. 
C) nonsufficient funds (NSF)check. 
D) cleared checks. 
A) electronic check. 
B) outstanding check. 
C) nonsufficient funds (NSF)check. 
D) cleared checks.

Question 11

What journal entry is prepared for a check with insufficient funds for payment?

Accepted Answer

A) No entry is prepared. 
B) Debit Cash and credit Accounts Payable. 
C) Debit Cash and credit Notes Payable. 
D) Debit Accounts Receivable and debit Cash. 
A) No entry is prepared. 
B) Debit Cash and credit Accounts Payable. 
C) Debit Cash and credit Notes Payable. 
D) Debit Accounts Receivable and debit Cash.

Question 12

New Store has the following information at August 31: • Two deposits made on August 31 were not on the bank statement,totaling $5,300.
• The bank collected an EFT payment on a note receivable for $2,750.Of this amount,$150 represented interest on the note.
• August 31 balance in Cash was $11,677.
• The bookkeeper forgot to record check #1578 for $843 which was cashed by the bank on August 15th.
• The balance on the bank statement as of August 31 was $10,500.
• A check printing fee of $40 was shown on the bank statement.NSF check $100.
• Checks #1572,1606,and 1548,totaling $2,356,were not shown on the bank statement,even though the company had sent the checks.
What is the adjusted bank balance at August 31?

Accepted Answer

A) $8,144 
B) $10,500 
C) $13,444 
D) $14,817 
A) $8,144 
B) $10,500 
C) $13,444 
D) $14,817

Question 13

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

Accepted Answer

A) True 
 B)False

Question 14

The control environment does NOT include:

Accepted Answer

A) a corporation's code of ethics. 
B) prohibition of bribes and kickbacks. 
C) risk assessment. 
D) avoidance of transactions that involve a conflict of interest. 
A) a corporation's code of ethics. 
B) prohibition of bribes and kickbacks. 
C) risk assessment. 
D) avoidance of transactions that involve a conflict of interest.

Question 15

In a cash budget,if the cash available before financing falls below the budgeted balance:

Accepted Answer

A) the company should reduce its cash receipts. 
B) the company can invest the excess cash. 
C) the company will need additional financing. 
D) the company is facing bankruptcy. 
A) the company should reduce its cash receipts. 
B) the company can invest the excess cash. 
C) the company will need additional financing. 
D) the company is facing bankruptcy.

Question 16

The bookkeeper recorded a deposit of $100 as $10.On the bank reconciliation,this will be a(n):

Accepted Answer

A) addition of $90 to the balance per bank. 
B) subtraction from the balance per bank. 
C) addition of $90 to the balance per books. 
D) subtraction of $90 to the balance per books. 
A) addition of $90 to the balance per bank. 
B) subtraction from the balance per bank. 
C) addition of $90 to the balance per books. 
D) subtraction of $90 to the balance per books.

Question 17

Dooley Company sent a deposit of $5,000 to the bank.The bank credited Dooley Company's checking account for a deposit of $500.When Dooley received the bank statement,they saw the deposit of $500.What journal entry should Dooley Company prepare?

Accepted Answer

A) Debit Cash for $4,500 and credit Deposits fo $4,500. 
B) Debit Cash for $4,500 and credit Revenue for $4,500. 
C) Debit Cash for $4,500 and credit Accounts Receivable for $4,500. 
D) No journal entry is required. 
A) Debit Cash for $4,500 and credit Deposits fo $4,500. 
B) Debit Cash for $4,500 and credit Revenue for $4,500. 
C) Debit Cash for $4,500 and credit Accounts Receivable for $4,500. 
D) No journal entry is required.

Question 18

Corbin Company was charged $25 for a check printing fee associated with their checking account.What journal entry is required?

Accepted Answer

A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required. 
A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required.

Question 19

Cash and cash equivalents do NOT include:

Accepted Answer

A) time deposits. 
B) petty cash. 
C) bank checking account. 
D) high-grade U.S.government securities maturing in 5 years. 
A) time deposits. 
B) petty cash. 
C) bank checking account. 
D) high-grade U.S.government securities maturing in 5 years.

Question 20

The Nichols Company borrowed $12,000 from the bank and agreed to keep $3,000 on deposit at all times.The stated rate of interest on the loan is 10%.What is the real rate of interest?

Accepted Answer

A) 10% 
B) 12% 
C) 13.3% 
D) 14% 
A) 10% 
B) 12% 
C) 13.3% 
D) 14%

A fidelity bond is a(n):

Which of the following statements about the lapping of Accounts Receivable is TRUE?

Managers control cash receipts and disbursements,as well as the ending cash balance,through a(n):

Opportunity in the fraud triangle arises from:

An employee states that he steals office supplies for his wife and children because "Everyone is doing it." This is an example of:

In a bank reconciliation,a bank service charge for printing checks is:

Internal controls for cash receipts over the counter and for cash receipts by mail are identical.

The duties of purchasing goods and receiving the goods should be given to the same employee.

Which of the following is a CORRECT statement regarding the bank reconciliation?

Another term for a "hot check" is:

What journal entry is prepared for a check with insufficient funds for payment?

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

The control environment does NOT include:

In a cash budget,if the cash available before financing falls below the budgeted balance:

The bookkeeper recorded a deposit of $100 as $10.On the bank reconciliation,this will be a(n):

Dooley Company sent a deposit of $5,000 to the bank.The bank credited Dooley Company's checking account for a deposit of $500.When Dooley received the bank statement,they saw the deposit of $500.What journal entry should Dooley Company prepare?

Corbin Company was charged $25 for a check printing fee associated with their checking account.What journal entry is required?

Cash and cash equivalents do NOT include:

The Nichols Company borrowed $12,000 from the bank and agreed to keep $3,000 on deposit at all times.The stated rate of interest on the loan is 10%.What is the real rate of interest?

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

A fidelity bond is a(n):

Which of the following statements about the lapping of Accounts Receivable is TRUE?

Managers control cash receipts and disbursements,as well as the ending cash balance,through a(n):

Opportunity in the fraud triangle arises from:

An employee states that he steals office supplies for his wife and children because "Everyone is doing it." This is an example of:

In a bank reconciliation,a bank service charge for printing checks is:

Internal controls for cash receipts over the counter and for cash receipts by mail are identical.

The duties of purchasing goods and receiving the goods should be given to the same employee.

Which of the following is a CORRECT statement regarding the bank reconciliation?

Another term for a "hot check" is:

What journal entry is prepared for a check with insufficient funds for payment?

Perpetrators of fraud usually commit fraud for their own short-term economic gain.

The control environment does NOT include:

In a cash budget,if the cash available before financing falls below the budgeted balance:

The bookkeeper recorded a deposit of $100 as $10.On the bank reconciliation,this will be a(n):

Dooley Company sent a deposit of $5,000 to the bank.The bank credited Dooley Company's checking account for a deposit of $500.When Dooley received the bank statement,they saw the deposit of $500.What journal entry should Dooley Company prepare?

Corbin Company was charged $25 for a check printing fee associated with their checking account.What journal entry is required?

Cash and cash equivalents do NOT include:

The Nichols Company borrowed $12,000 from the bank and agreed to keep $3,000 on deposit at all times.The stated rate of interest on the loan is 10%.What is the real rate of interest?

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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