Question 1

For effective internal control in an organization, who should keep the inventory records?

Accepted Answer

A)  accountant 
B)  treasurer 
C)  sales persons 
D)  inventory warehouse supervisor 
A)  accountant 
B)  treasurer 
C)  sales persons 
D)  inventory warehouse supervisor

Question 2

Which characteristic will not be found in an effective system of internal control?

Accepted Answer

A)  a combination of duties 
B)  a separation of duties 
C)  competent, reliable, and ethical personnel 
D)  documents and records 
A)  a combination of duties 
B)  a separation of duties 
C)  competent, reliable, and ethical personnel 
D)  documents and records

Question 3

A fund with a small amount of cash on hand for minor payments is called a:

Accepted Answer

A)  petty cash fund 
B)  miscellaneous expense fund 
C)  money market fund 
D)  cash disbursement fund 
A)  petty cash fund 
B)  miscellaneous expense fund 
C)  money market fund 
D)  cash disbursement fund

Question 4

The cost of printing cheques should be deducted from the bank side of a bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 5

In a bank reconciliation, adjustments to the bank balance always require preparation of journal entries.

Accepted Answer

A) True 
 B)False

Question 6

What is a bank reconciliation? Why is it important to prepare a bank reconciliation every month when the bank statement is received from the bank?

Accepted Answer

A bank reconciliation is an internal con

Question 7

If the bank records a deposit of $50 as $150, the error would be shown on a bank reconciliation as:

Accepted Answer

A)  a deduction from the book balance of $100 
B)  an addition to the book balance of $100 
C)  a deduction from the bank balance of $100 
D)  an addition to the bank balance of $100 
A)  a deduction from the book balance of $100 
B)  an addition to the book balance of $100 
C)  a deduction from the bank balance of $100 
D)  an addition to the bank balance of $100

Question 8

In a bank reconciliation, a bank collection is:

Accepted Answer

A)  added to the bank balance on the bank statement 
B)  deducted from the bank balance on the bank statement 
C)  added to the bank balance in the general ledger 
D)  deducted from the bank balance in the general ledger 
A)  added to the bank balance on the bank statement 
B)  deducted from the bank balance on the bank statement 
C)  added to the bank balance in the general ledger 
D)  deducted from the bank balance in the general ledger

Question 9

If a bank statement included a bank collection and related interest revenue, the journal entry to record this reconciling item would include a:

Accepted Answer

A)  debit to Note Receivable 
B)  credit to Cash 
C)  debit to Cash 
D)  debit to Note Payable 
A)  debit to Note Receivable 
B)  credit to Cash 
C)  debit to Cash 
D)  debit to Note Payable

Question 10

Which of the following items below may be made to reconcile a book balance to a bank balance?

Accepted Answer

A)  a deposit in transit 
B)  an EFT receipt 
C)  outstanding cheques 
D)  an addition or subtraction to correct a bank error, as appropriate 
A)  a deposit in transit 
B)  an EFT receipt 
C)  outstanding cheques 
D)  an addition or subtraction to correct a bank error, as appropriate

Question 11

Outstanding cheques are deposits you have recorded but the bank has not.

Accepted Answer

A) True 
 B)False

Question 12

The following data have been gathered for Rocky Candi Corporation for the month ended September 30, 2014. Prepare a bank reconciliation based on the following information:

Accepted Answer

@#IMG-DLM&_TB4002_00_TB4002_00

Question 13

The most common form of management fraud is earnings management.

Accepted Answer

A) True 
 B)False

Question 14

If the bookkeeper mistakenly records a deposit of $530 as $350, the error would be shown on the bank reconciliation statement as a:

Accepted Answer

A)  $180 deduction from the book balance 
B)  $180 deduction from the bank balance 
C)  $180 addition to the bank balance 
D)  $180 addition to the book balance 
A)  $180 deduction from the book balance 
B)  $180 deduction from the bank balance 
C)  $180 addition to the bank balance 
D)  $180 addition to the book balance

Question 15

Proper separation of duties in an organization is an effective method of preventing fraud.

Accepted Answer

A) True 
 B)False

Question 16

Internal control procedures include: proper approvals, unlimited access, adequate records and safeguard controls.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following does not require a journal entry for a bank reconciliation?

Accepted Answer

A)  outstanding cheques 
B)  bank service charge 
C)  collection by the bank of a note receivable 
D)  NSF cheque returned by the bank 
A)  outstanding cheques 
B)  bank service charge 
C)  collection by the bank of a note receivable 
D)  NSF cheque returned by the bank

Question 18

A cash budget includes:

Accepted Answer

A)  estimated cash payments, accounts receivable, and accounts payable balances 
B)  estimated cash receipts, accounts receivable, and accounts payable balances 
C)  estimated cash receipts and cash payments 
D)  estimated cash receipts, cash payments, and noncash expenses such as amortization expense 
A)  estimated cash payments, accounts receivable, and accounts payable balances 
B)  estimated cash receipts, accounts receivable, and accounts payable balances 
C)  estimated cash receipts and cash payments 
D)  estimated cash receipts, cash payments, and noncash expenses such as amortization expense

Question 19

From the following information, prepare a cash budget for Quick Turtle Ltd. for the year ended December 31, 2014.
   The Cash balance on January 1, 2014, is $100,300. The budgeted cash balance for December 31, 2014, is $90,000.

Accepted Answer

@#IMG-DLM&_TB4002_00_TB4002_00 @#IMG-DLM&_TB4002_0

Question 20

The asset requiring the highest level of internal control is:

Accepted Answer

A)  Cash 
B)  Accounts Receivable 
C)  Inventory 
D)  Capital Assets 
A)  Cash 
B)  Accounts Receivable 
C)  Inventory 
D)  Capital Assets

For effective internal control in an organization, who should keep the inventory records?

Which characteristic will not be found in an effective system of internal control?

A fund with a small amount of cash on hand for minor payments is called a:

The cost of printing cheques should be deducted from the bank side of a bank reconciliation.

In a bank reconciliation, adjustments to the bank balance always require preparation of journal entries.

What is a bank reconciliation? Why is it important to prepare a bank reconciliation every month when the bank statement is received from the bank?

If the bank records a deposit of $50 as $150, the error would be shown on a bank reconciliation as:

In a bank reconciliation, a bank collection is:

If a bank statement included a bank collection and related interest revenue, the journal entry to record this reconciling item would include a:

Which of the following items below may be made to reconcile a book balance to a bank balance?

Outstanding cheques are deposits you have recorded but the bank has not.

The following data have been gathered for Rocky Candi Corporation for the month ended September 30, 2014. Prepare a bank reconciliation based on the following information:

The most common form of management fraud is earnings management.

If the bookkeeper mistakenly records a deposit of $530 as $350, the error would be shown on the bank reconciliation statement as a:

Proper separation of duties in an organization is an effective method of preventing fraud.

Internal control procedures include: proper approvals, unlimited access, adequate records and safeguard controls.

Which of the following does not require a journal entry for a bank reconciliation?

A cash budget includes:

From the following information, prepare a cash budget for Quick Turtle Ltd. for the year ended December 31, 2014. The Cash balance on January 1, 2014, is $100,300. The budgeted cash balance for December 31, 2014, is $90,000.

The asset requiring the highest level of internal control is:

The Financial Statements

Recording Business Transactions

Accrual Accounting and the Financial Statements

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Income Statement, the Statement of Comprehensive Income, and the Statement of Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

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Exam 4: Internal Control and Cash

For effective internal control in an organization, who should keep the inventory records?

Which characteristic will not be found in an effective system of internal control?

A fund with a small amount of cash on hand for minor payments is called a:

The cost of printing cheques should be deducted from the bank side of a bank reconciliation.

In a bank reconciliation, adjustments to the bank balance always require preparation of journal entries.

What is a bank reconciliation? Why is it important to prepare a bank reconciliation every month when the bank statement is received from the bank?

If the bank records a deposit of $50 as $150, the error would be shown on a bank reconciliation as:

In a bank reconciliation, a bank collection is:

If a bank statement included a bank collection and related interest revenue, the journal entry to record this reconciling item would include a:

Which of the following items below may be made to reconcile a book balance to a bank balance?

Outstanding cheques are deposits you have recorded but the bank has not.

The following data have been gathered for Rocky Candi Corporation for the month ended September 30, 2014. Prepare a bank reconciliation based on the following information:

The most common form of management fraud is earnings management.

If the bookkeeper mistakenly records a deposit of $530 as $350, the error would be shown on the bank reconciliation statement as a:

Proper separation of duties in an organization is an effective method of preventing fraud.

Internal control procedures include: proper approvals, unlimited access, adequate records and safeguard controls.

Which of the following does not require a journal entry for a bank reconciliation?

A cash budget includes:

From the following information, prepare a cash budget for Quick Turtle Ltd. for the year ended December 31, 2014. The Cash balance on January 1, 2014, is $100,300. The budgeted cash balance for December 31, 2014, is $90,000.

The asset requiring the highest level of internal control is:

The Financial Statements

Recording Business Transactions

Accrual Accounting and the Financial Statements

Short-Term Investments and Receivables

Inventory and Cost of Goods Sold

Property, Plant, and Equipment, and Intangible Assets

Long-Term Investments and the Time Value of Money

Liabilities

Shareholders Equity

The Income Statement, the Statement of Comprehensive Income, and the Statement of Shareholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters