Question 1

Protecting against theft of assets and enhancing accounting information is the objective of:

Accepted Answer

A)  loan covenants.
B)  government regulations.
C)  internal controls.
D)  the external auditors.E) B) and D)
F) C) and D)

Question 2

The internal control principle related to assigning responsibilities so that one employee cannot make a mistake or commit a dishonest act without someone else discovering it is referred to as:

Accepted Answer

A)  duplication of responsibility.
B)  mandatory vacations.
C)  segregation of duties.
D)  rotation of duties.E) A) and B)
F) A) and C)

Question 3

When cash is received from a remote source,the accounting department then compares the total on the cash receipts list with the stamped deposit slip received from the bank.Which internal control principle is being met with this procedure?

Accepted Answer

A)  Document procedures
B)  Independently verify
C)  Restrict access
D)  Segregate dutiesE) A) and B)
F) None of the above

Question 4

Which of the following is added to the bank balance on a bank reconciliation?

Accepted Answer

A)  Deposits in transit
B)  Outstanding checks
C)  EFT received from customers
D)  Bank service chargeE) A) and D)
F) None of the above

Question 5

What is the primary goal of internal controls for cash payments?

Accepted Answer

A)  To ensure the lowest prices possible are paid.
B)  To make payments as quickly as possible.
C)  To ensure that payments are made only for properly authorized transactions.
D)  To independently verify cash payments.E) A) and B)
F) All of the above

Question 6

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Accepted Answer

A) True 
 B)False

Question 7

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Accepted Answer

A)  documenting procedures.
B)  segregating duties.
C)  establishing responsibilities.
D)  restricting access.E) B) and C)
F) A) and C)

Question 8

Which principle of internal control states that you should assign each task to only one employee?

Accepted Answer

A)  Segregation of duties
B)  Establishing responsibility
C)  Restricting access
D)  Independently verifyingE) All of the above
F) A) and C)

Question 9

On a bank reconciliation,the amount of an NSF check is:

Accepted Answer

A)  added to the bank balance of cash.
B)  added to the company's balance of cash.
C)  deducted from the bank balance of cash.
D)  deducted from the company's balance of cash.E) All of the above
F) A) and D)

Question 10

Considering current laws that deal with misstatements of financial results,which of the following statements is correct?

Accepted Answer

A)  Managers found guilty can escape paying fines if they declare bankruptcy.
B)  Managers can be sentenced to maximum jail terms of up to 20 years for each violation.
C)  Managers found guilty may keep any bonuses or profits from the misrepresentation if their fines are less than such bonuses or profits.
D)  Whistleblowers who secretly submit concerns about questionable accounting practices will be fired.E) A) and B)
F) A) and C)

Question 11

A cashier for Seaside Electronics rang up sales totaling $8,000,but had only $7,994 to deposit,which journal entry would be recorded? A debit to:

Accepted Answer

A)  Cash of $7,994 and Cash Shortage of $6 and a credit to Sales Revenue of $8,000.
B)  Sales Revenue of $7,994 and Cash Shortage of $6 and a credit to Cash of $8,000.
C)  Cash of $7,994 and a credit to Cash Shortage of $6 and Sales Revenue of $8,000.
D)  Cash of $7,994 and Cash Shortage of $6 and a credit to Unearned Revenue of $8,000.E) None of the above
F) A) and D)

Question 12

Internal controls include the policies and procedures a company implements to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.

Accepted Answer

A) True 
 B)False

Question 13

The bank will show a customer's withdrawal as a:

Accepted Answer

A)  debit,because cash is an asset.
B)  credit,because a withdrawal increases its liability from the bank's point of view.
C)  debit,because a withdrawal decreases its liability from the bank's point of view.
D)  credit,because cash is an asset.E) A) and D)
F) A) and C)

Question 14

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 is the up-to-date ending Cash balance?

Accepted Answer

A)  $14,400
B)  $13,784
C)  $15,200
D)  $15,416E) All of the above
F) A) and D)

Question 15

The cashier for Bell Buoy rang up sales totaling $7,644,but had $7,650 to deposit,which journal entry would be recorded?

Accepted Answer

A)  A debit to Cash for $7,650,a credit to Cash Overage for $6,and a credit to Sales Revenue for $7,644.
B)  A debit to Sales for $7,650,a debit to Cash Overage for $6,and a credit to Cash for $7,644.
C)  A debit to Cash for $7,644,a debit to Cash Shortage for $6,and a credit to Sales Revenue for $7,650.
D)  A debit to Cash for $7,644,a debit to Cash Shortage for $6,and a credit to Unearned Revenue for $7,650.E) C) and D)
F) All of the above

Question 16

Which of the following statements is correct regarding a voucher system?

Accepted Answer

A)  The journal entry to record the asset purchased and liability owed should be recorded when the bill for goods or services is received.
B)  A voucher system is most commonly used in very small companies to make up for the lack of other internal controls.
C)  A well-designed voucher system will allow employees requiring office supplies to place orders directly with suppliers for control purposes.
D)  A well-designed voucher system will eliminate fraud and errors.E) None of the above
F) A) and D)

Question 17

You are the accountant for Georgia Company and you have recently received the bank statement for your company's account and need to reconcile it with your general ledger cash account.Georgia's records show an ending balance for the month of $25,444.80 while the bank's records show an ending balance of $24,734.32.The bank charged $16 in service fees and paid $52.10 in interest.
All but three checks written during the month were processed by the bank without incident during the month.The three exceptions were:
Check #841 was correctly processed by the bank as $1,962.54 but was mistakenly recorded by you as $1,562.54.
Check #853 for $129.14 had not yet been processed by the bank.
Check #855 for $1,366.92 had not yet been processed by the bank.
All but two of the deposits made during the month were processed by the bank without incident.The two exceptions were:
A customer check for $615.90,which had been deposited during the month,was returned NSF.
A deposit totaling $1,226.74 had not yet been processed by the bank.
Required:
Using the information provided above,prepare a bank reconciliation.(Round your answers to 2 decimal places. )

Accepted Answer

The answer of You are the accountant for Georgia Company...

Question 18

A check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period.In preparing the bank reconciliation for this period,the amount of this check should be:

Accepted Answer

A)  added to the bank balance of cash.
B)  ignored in preparing this period's bank reconciliation.
C)  deducted from the bank balance of cash.
D)  deducted from the company's balance of cash.E) C) and D)
F) A) and B)

Question 19

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

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) C) and I)
N) C) and H)

Question 20

Assigning responsibilities so that related activities are assigned to two or more people is the goal of:

Accepted Answer

A)  restricting access.
B)  segregating duties.
C)  independently verifying.
D)  documenting procedures.E) All of the above
F) None of the above

Exam 5: Fraud,Internal Control,and Cash

A cashier for Seaside Electronics rang up sales totaling $8,000,but had only $7,994 to deposit,which journal entry would be recorded? A debit to:

Correct Answer
verified

Internal controls include the policies and procedures a company implements to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.

Correct Answer
verified

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Correct Answer
verified

Protecting against theft of assets and enhancing accounting information is the objective of:

Correct Answer
verified

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

Correct Answer
verified

A check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period.In preparing the bank reconciliation for this period,the amount of this check should be:

Correct Answer
verified

The internal control principle related to assigning responsibilities so that one employee cannot make a mistake or commit a dishonest act without someone else discovering it is referred to as:

Correct Answer
verified

Considering current laws that deal with misstatements of financial results,which of the following statements is correct?

Correct Answer
verified

What is the primary goal of internal controls for cash payments?

Correct Answer
verified

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Correct Answer
verified

Which of the following is added to the bank balance on a bank reconciliation?

Correct Answer
verified

Correct Answer
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Which principle of internal control states that you should assign each task to only one employee?

Correct Answer
verified

On a bank reconciliation,the amount of an NSF check is:

Correct Answer
verified

The bank will show a customer's withdrawal as a:

Correct Answer
verified

Correct Answer
verified

The cashier for Bell Buoy rang up sales totaling $7,644,but had $7,650 to deposit,which journal entry would be recorded?

Correct Answer
verified

When cash is received from a remote source,the accounting department then compares the total on the cash receipts list with the stamped deposit slip received from the bank.Which internal control principle is being met with this procedure?

Correct Answer
verified

Assigning responsibilities so that related activities are assigned to two or more people is the goal of:

Correct Answer
verified

Which of the following statements is correct regarding a voucher system?

Correct Answer
verified

Exam 5: Fraud,Internal Control,and Cash

A cashier for Seaside Electronics rang up sales totaling $8,000,but had only $7,994 to deposit,which journal entry would be recorded? A debit to:

Correct AnswerverifiedShow Answer

Internal controls include the policies and procedures a company implements to promote efficient and effective operations,protect assets,enhance accounting information,and adhere to laws and regulations.

Correct AnswerverifiedShow Answer

The fraud triangle identifies incentive,opportunity,and benchmarks as the requirements for a fraud to occur.

Correct AnswerverifiedShow Answer

Protecting against theft of assets and enhancing accounting information is the objective of:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period.In preparing the bank reconciliation for this period,the amount of this check should be:

Correct AnswerverifiedShow Answer

The internal control principle related to assigning responsibilities so that one employee cannot make a mistake or commit a dishonest act without someone else discovering it is referred to as:

Correct AnswerverifiedShow Answer

Considering current laws that deal with misstatements of financial results,which of the following statements is correct?

Correct AnswerverifiedShow Answer

What is the primary goal of internal controls for cash payments?

Correct AnswerverifiedShow Answer

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Correct AnswerverifiedShow Answer

Which of the following is added to the bank balance on a bank reconciliation?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which principle of internal control states that you should assign each task to only one employee?

Correct AnswerverifiedShow Answer

On a bank reconciliation,the amount of an NSF check is:

Correct AnswerverifiedShow Answer

The bank will show a customer's withdrawal as a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The cashier for Bell Buoy rang up sales totaling $7,644,but had $7,650 to deposit,which journal entry would be recorded?

Correct AnswerverifiedShow Answer

When cash is received from a remote source,the accounting department then compares the total on the cash receipts list with the stamped deposit slip received from the bank.Which internal control principle is being met with this procedure?

Correct AnswerverifiedShow Answer

Assigning responsibilities so that related activities are assigned to two or more people is the goal of:

Correct AnswerverifiedShow Answer

Which of the following statements is correct regarding a voucher system?

Correct AnswerverifiedShow Answer

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