Question 1

Money orders are considered cash.

Accepted Answer

A) True 
 B)False

Question 2

A voucher

Accepted Answer

A)  is received from customers to explain the purpose of a payment.
B)  is normally prepared in the Accounting Department.
C)  system is used to control cash receipts.
D)  system is an internal control procedure to verify that the assets in the records are the ones the company owns.E) None of the above
F) B) and C)

Question 3

A check drawn by a depositor for $810 in payment of a liability was recorded by the depositor as $180.This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)  addition to the balance per the depositor's records.
B)  addition to the balance per the bank statement.
C)  deduction from the balance per the bank statement.
D)  deduction from the balance per the depositor's records.E) A) and B)
F) A) and C)

Question 4

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

Accepted Answer

A) True 
 B)False

Question 5

Separating the custody of assets from accounting for assets is a part of which element of internal control?

Accepted Answer

A)  Information and communication
B)  Monitoring
C)  The control environment
D)  Control proceduresE) B) and D)
F) A) and C)

Question 6

Cash equivalents include

Accepted Answer

A)  checks.
B)  coins and currency.
C)  money market accounts and commercial paper.
D)  stocks and short-term bonds.E) C) and D)
F) A) and D)

Question 7

What is a special-purpose cash fund? What is its purpose? Give two examples.

Accepted Answer

A special-purpose cash fund is...

Question 8

In preparing a bank reconciliation,the amount of outstanding checks is added to the balance per depositor's statement.

Accepted Answer

A) True 
 B)False

Question 9

Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500.This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)  deduction from the balance per depositor's records.
B)  addition to the balance per bank statement.
C)  deduction from the balance per bank statement.
D)  addition to the balance per depositor's records.E) A) and B)
F) None of the above

Question 10

Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer.What adjustment is required in the depositor's accounts?

Accepted Answer

A)  Increase Notes Receivable;decrease Cash
B)  Increase Cash;increase Miscellaneous Income
C)  Increase Cash;decrease Notes Receivable
D)  Increase Accounts Receivable;decrease CashE) A) and C)
F) B) and C)

Question 11

Internal controls are important because they

Accepted Answer

A)  prevent fraud and misleading financial statements.
B)  eliminate fraud.
C)  deter fraud and prevent theft and other abuses.
D)  guarantee accurate financial statements.E) C) and D)
F) A) and B)

Question 12

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositor's records.

Accepted Answer

A) True 
 B)False

Question 13

A business that requires that all cash payments be made by check CANNOT use a petty
cash system.

Accepted Answer

A) True 
 B)False

Question 14

A special cash fund used to make small payments that occur frequently is called a(n)

Accepted Answer

A)  operating expenses fund.
B)  change fund.
C)  market fund.
D)  petty cash fund.E) All of the above
F) C) and D)

Question 15

List the objectives of internal control and give an example of how each is implemented.

Accepted Answer

Internal control provides reas...

Question 16

Which of the following reflects a weak internal control system?

Accepted Answer

A)  All employees are well supervised.
B)  A single employee is responsible for comparing a receiving report to an invoice.
C)  All employees must take their vacations.
D)  A single employee is responsible for the collecting and recording of cash.E) A) and D)
F) C) and D)

Question 17

Bank customers are considered owners of the bank so the bank shows their accounts as an asset on the bank's records.

Accepted Answer

A) True 
 B)False

Question 18

The purpose of the Sarbanes-Oxley Act of 2002 is to

Accepted Answer

A)  restore public confidence and trust in the financial statements of publicly held companies.
B)  require all companies to prepare financial statements.
C)  protect companies from demands of investors,stockholders,and creditors.
D)  do all of these.E) A) and D)
F) None of the above

Question 19

Information and communication are essential elements of an organization's internal control.

Accepted Answer

A) True 
 B)False

Question 20

A credit memorandum from the bank

Accepted Answer

A)  decreases a bank customer's account.
B)  Is used to show a bank service charge.
C)  shows that a company has deposited a customer's NSF check.
D)  shows the bank has collected a note receivable for the customer.E) A) and B)
F) All of the above

Exam 5: Sarbanes-Oxley,internal Control,and Cash

Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500.This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

A special cash fund used to make small payments that occur frequently is called a(n)

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositor's records.

Correct AnswerverifiedShow Answer

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

Correct AnswerverifiedShow Answer

Internal controls are important because they

Correct AnswerverifiedShow Answer

Separating the custody of assets from accounting for assets is a part of which element of internal control?

Correct AnswerverifiedShow Answer

A business that requires that all cash payments be made by check CANNOT use a petty cash system.

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount of outstanding checks is added to the balance per depositor's statement.

Correct AnswerverifiedShow Answer

Cash equivalents include

Correct AnswerverifiedShow Answer

A credit memorandum from the bank

Correct AnswerverifiedShow Answer

A voucher

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer.What adjustment is required in the depositor's accounts?

Correct AnswerverifiedShow Answer

List the objectives of internal control and give an example of how each is implemented.

Correct AnswerverifiedInternal control provides reas...View AnswerShow Answer

The purpose of the Sarbanes-Oxley Act of 2002 is to

Correct AnswerverifiedShow Answer

Information and communication are essential elements of an organization's internal control.

Correct AnswerverifiedShow Answer

What is a special-purpose cash fund? What is its purpose? Give two examples.

Correct AnswerverifiedA special-purpose cash fund is...View AnswerShow Answer

Money orders are considered cash.

Correct AnswerverifiedShow Answer

Which of the following reflects a weak internal control system?

Correct AnswerverifiedShow Answer

Bank customers are considered owners of the bank so the bank shows their accounts as an asset on the bank's records.

Correct AnswerverifiedShow Answer

A check drawn by a depositor for $810 in payment of a liability was recorded by the depositor as $180.This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Internal control provides reas...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A special-purpose cash fund is...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified