Question 1

Which of the following is not a commonly used internal control?

Accepted Answer

A)  Mandatory vacations
B)  Anonymous hotlines
C)  Bonding employees
D)  Consolidating dutiesE) A) and D)
F) C) and D)

Question 2

While preparing the bank reconciliation for March,the accountant for Bertran Industries discovered that a $649 check in payment of an account payable had been entered incorrectly in the journal as $694.Which of the following is true?

Accepted Answer

A)  An adjusting entry must be made to debit Cash and credit Accounts Payable for $45.
B)  An adjusting entry must be made to debit Accounts Payable and credit Cash for $45.
C)  The bank should be notified,and the bank should correct its records by adding $45 to the company's account.
D)  No entry is needed for the reconciling item because it appears on the bank's side of the reconciliation.E) A) and D)
F) A) and C)

Question 3

When the cash count sheets for the day equal $14,140 and the cash register reports $14,280,the journal entry to record the sales will include a:

Accepted Answer

A)  debit to Cash Shortage
B)  credit to Cash Shortage
C)  credit to Cash Overage
D)  debit to Cash OverageE) None of the above
F) All of the above

Question 4

Brown Industries plans to decrease a $294 petty cash fund to $108.The current balance in the account includes $60 in receipts and $234 in currency.The entry to reimburse and reduce the size of the petty cash fund will include a:

Accepted Answer

A)  credit to Cash for $126.
B)  debit to Cash for $126.
C)  debit to Petty Cash for $60.
D)  debit to Petty Cash for $108.E) C) and D)
F) All of the above

Question 5

Which of the following items on a bank reconciliation would require a journal entry on a company's books?

Accepted Answer

A)  An error by the bank
B)  Outstanding checks
C)  A bank service charge
D)  A deposit in transitE) A) and B)
F) B) and D)

Question 6

Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

Accepted Answer

A)  Segregate duties
B)  Establish responsibilities
C)  Independently verify
D)  Restrict accessE) A) and B)
F) A) and C)

Question 7

The journal entry to establish a petty cash fund should include a debit to:

Accepted Answer

A)  Cash and a credit to Petty Cash.
B)  Petty Cash and a credit to Cash.
C)  Petty Cash and a credit to Accounts Receivable.
D)  Cash and a credit to Petty Cash Shortage.E) B) and C)
F) A) and D)

Question 8

Why was the Sarbanes-Oxley Act (SOX) enacted?

Accepted Answer

A)  To bring GAAP closer to global financial reporting standards.
B)  The lack of significant corporate frauds during the late 1990s and early 2000s warranted less monitoring for external stakeholders.
C)  To improve the financial reporting and restore investor confidence.
D)  Accounting rules had become so complex that investors could no longer understand them.E) A) and C)
F) A) and D)

Question 9

On October 31,2018,your company's records say that the company has $16,451.03 in its checking account.A review of the bank statement shows you have three outstanding checks totaling $5,643.01,and the bank has paid you interest of $12.19 and charged you $9.00 in service charges.The bank statement dated October 31,2018 would report a balance of:

Accepted Answer

A)  $22,090.85.
B)  $16,454.22.
C)  $22,097.23.
D)  $10,804.83.E) None of the above
F) B) and C)

Question 10

The preparation of a list of goods received is an example of:

Accepted Answer

A)  establishment of responsibility.
B)  segregation of duties.
C)  document procedures.
D)  independent verification.E) A) and B)
F) All of the above

Question 11

Which of the following is an internal control for checks received through the mail?

Accepted Answer

A)  The Cashier prepares a journal entry to record price,quantity sold,and cash received.
B)  The accounting department counts the cash,prepares the deposit slip and deposits the cash in the bank.
C)  The accounting department compares the cash in the register with the cash count sheet.
D)  The mail clerk gives checks and money orders to the person who makes the bank deposit.E) A) and B)
F) B) and C)

Question 12

Which of the following statements concerning a voucher is not correct?

Accepted Answer

A)  The voucher consists of the purchase requisition,the purchase order,the receiving report,and the invoice.
B)  The voucher is marked "paid" so that it cannot be accidentally or intentionally resubmitted for duplicate payment.
C)  The voucher must be prepared before the goods or services are ordered.
D)  After the voucher is prepared,the company processes a check or electronic funds transfer to pay for the items purchased and received.E) A) and D)
F) All of the above

Question 13

The control environment:

Accepted Answer

A)  is the attitude that people in the organization hold regarding internal control.
B)  requires managers to continuously assess the potential for fraud and other risks.
C)  generates and communicates information about activities affecting the organization.
D)  includes the various work responsibilities and duties completed by employees to reduce risks.E) A) and D)
F) All of the above

Question 14

Match the term to the appropriate definition.There are more definitions than terms.
-Cash

Accepted Answer

A)  Money or any instrument that banks will accept for deposit and immediately credit to a company's account.
B)  A process for approving and documenting all purchases and payments on account.
C)  Short-term,highly liquid investments purchased within three months of maturity.
D)  Actions taken to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.
E)  Not available for general use but rather restricted for a specific purpose.F) An internal control designed into the accounting system to prevent an employee from making a mistake or committing a dishonest act as part of one assigned duty and then also covering it up through another assigned duty.G) Another name for bounced checks.They arise when the check writer (your customer) does not have sufficient funds to cover the amount of the check.H) An attempt to deceive others for personal gain.I) A set of regulations passed by Congress in 2002 in an attempt to improve financial reporting and restore investor confidence.J) An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual.K) A process that controls the amount paid to others by limiting the total amount of money available for making payments to others.L) Terms of a loan agreement that if broken,entitle the lender to renegotiate loan terms or force repayment.M) A) and B)
N) A) and C)

Question 15

Egrane,Inc.'s monthly bank statement showed the ending balance of cash of $14,800.The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,200,outstanding checks of $1,600,a NSF check of $560,bank service charges of $24 and the EFT from a customer in payment of the customer's account of $1,200. What journal entry should be recorded by Egrane for the EFT?

Accepted Answer

A)  Debit Cash and credit Accounts Receivable for $1,200.
B)  Debit Accounts Receivable and credit Cash for $1,200.
C)  Debit Cash and credit Sales Revenue for $1,200.
D)  No journal entry is necessary for this item.E) A) and B)
F) All of the above

Question 16

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a(n) :

Accepted Answer

A)  internal audit.
B)  bank reconciliation.
C)  bank audit.
D)  trial reconciliation.E) A) and B)
F) A) and C)

Question 17

Match the term to the appropriate definition.There are more definitions than terms.
-Restricted Cash

Accepted Answer

A)  Money or any instrument that banks will accept for deposit and immediately credit to a company's account.
B)  A process for approving and documenting all purchases and payments on account.
C)  Short-term,highly liquid investments purchased within three months of maturity.
D)  Actions taken to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.
E)  Not available for general use but rather restricted for a specific purpose.F) An internal control designed into the accounting system to prevent an employee from making a mistake or committing a dishonest act as part of one assigned duty and then also covering it up through another assigned duty.G) Another name for bounced checks.They arise when the check writer (your customer) does not have sufficient funds to cover the amount of the check.H) An attempt to deceive others for personal gain.I) A set of regulations passed by Congress in 2002 in an attempt to improve financial reporting and restore investor confidence.J) An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual.K) A process that controls the amount paid to others by limiting the total amount of money available for making payments to others.L) Terms of a loan agreement that if broken,entitle the lender to renegotiate loan terms or force repayment.M) D) and L)
N) A) and B)

Question 18

Match the term to the appropriate definition.There are more definitions than terms.
-Sarbanes-Oxley Act (SOX)

Accepted Answer

A)  A set of regulations passed by Congress in 2002 in an attempt to improve financial reporting and restore investor confidence.
B)  A process for approving and documenting all purchases and payments on account.
C)  An attempt to deceive others for personal gain.
D)  Terms of a loan agreement that if broken,entitle the lender to renegotiate loan terms or force repayment.
E)  Short-term,highly liquid investments purchased within three months of maturity.F) Another name for bounced checks.They arise when the check writer (your customer) does not have sufficient funds to cover the amount of the check.G) An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual.H) Actions taken to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.I) An internal control designed into the accounting system to prevent an employee from making a mistake or committing a dishonest act as part of one assigned duty and then also covering it up through another assigned duty.J) Not available for general use but rather restricted for a specific purpose.K) A process that controls the amount paid to others by limiting the total amount of money available for making payments to others.L) Money or any instrument that banks will accept for deposit and immediately credit to a company's account.M) E) and H)
N) A) and D)

Question 19

Which of the following is not an example of internal control?

Accepted Answer

A)  Use of passwords to restrict access to computer systems.
B)  Bonding employees.
C)  Periodic bank reconciliations.
D)  Customer satisfaction surveys.E) A) and B)
F) A) and C)

Question 20

The continuous assessment by management to assess the potential for fraud and other risks is referred to as:

Accepted Answer

A)  the control environment.
B)  information and communication.
C)  monitoring activities.
D)  risk assessment.E) C) and D)
F) A) and D)

Exam 5: Fraud,Internal Control,and Cash

Which of the following items on a bank reconciliation would require a journal entry on a company's books?

Correct Answer
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Which of the following statements concerning a voucher is not correct?

Correct Answer
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Which of the following is not an example of internal control?

Correct Answer
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The journal entry to establish a petty cash fund should include a debit to:

Correct Answer
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Which of the following is not a commonly used internal control?

Correct Answer
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Correct Answer
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Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

Correct Answer
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Which of the following is an internal control for checks received through the mail?

Correct Answer
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Brown Industries plans to decrease a $294 petty cash fund to $108.The current balance in the account includes $60 in receipts and $234 in currency.The entry to reimburse and reduce the size of the petty cash fund will include a:

Correct Answer
verified

Why was the Sarbanes-Oxley Act (SOX) enacted?

Correct Answer
verified

The continuous assessment by management to assess the potential for fraud and other risks is referred to as:

Correct Answer
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Match the term to the appropriate definition.There are more definitions than terms. -Sarbanes-Oxley Act (SOX)

Correct Answer
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When the cash count sheets for the day equal $14,140 and the cash register reports $14,280,the journal entry to record the sales will include a:

Correct Answer
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Match the term to the appropriate definition.There are more definitions than terms. -Cash

Correct Answer
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While preparing the bank reconciliation for March,the accountant for Bertran Industries discovered that a $649 check in payment of an account payable had been entered incorrectly in the journal as $694.Which of the following is true?

Correct Answer
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The control environment:

Correct Answer
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Correct Answer
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The preparation of a list of goods received is an example of:

Correct Answer
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An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a(n) :

Correct Answer
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Match the term to the appropriate definition.There are more definitions than terms. -Restricted Cash

Correct Answer
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Exam 5: Fraud,Internal Control,and Cash

Which of the following items on a bank reconciliation would require a journal entry on a company's books?

Correct AnswerverifiedShow Answer

Which of the following statements concerning a voucher is not correct?

Correct AnswerverifiedShow Answer

Which of the following is not an example of internal control?

Correct AnswerverifiedShow Answer

The journal entry to establish a petty cash fund should include a debit to:

Correct AnswerverifiedShow Answer

Which of the following is not a commonly used internal control?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cashiers at a supermarket have to talk to a manager before approving price changes at the register.Which internal control principle is being followed?

Correct AnswerverifiedShow Answer

Which of the following is an internal control for checks received through the mail?

Correct AnswerverifiedShow Answer

Brown Industries plans to decrease a $294 petty cash fund to $108.The current balance in the account includes $60 in receipts and $234 in currency.The entry to reimburse and reduce the size of the petty cash fund will include a:

Correct AnswerverifiedShow Answer

Why was the Sarbanes-Oxley Act (SOX) enacted?

Correct AnswerverifiedShow Answer

The continuous assessment by management to assess the potential for fraud and other risks is referred to as:

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Sarbanes-Oxley Act (SOX)

Correct AnswerverifiedShow Answer

When the cash count sheets for the day equal $14,140 and the cash register reports $14,280,the journal entry to record the sales will include a:

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Cash

Correct AnswerverifiedShow Answer

While preparing the bank reconciliation for March,the accountant for Bertran Industries discovered that a $649 check in payment of an account payable had been entered incorrectly in the journal as $694.Which of the following is true?

Correct AnswerverifiedShow Answer

The control environment:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The preparation of a list of goods received is an example of:

Correct AnswerverifiedShow Answer

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a(n) :

Correct AnswerverifiedShow Answer

Match the term to the appropriate definition.There are more definitions than terms. -Restricted Cash

Correct AnswerverifiedShow Answer

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