Question 1

An element of internal control is

Accepted Answer

A)   risk assessment
B)   journals
C)   subsidiary ledgers
D)   controlling accountsE) A) and C)
F) C) and D)

Question 2

Which of the following is not an internal control activity for cash?

Accepted Answer

A)   The number of persons who have access to cash should be limited.
B)   All cash receipts should be recorded promptly.
C)   The functions of record keeping and maintaining custody of cash should be combined.
D)   Surprise audits of cash on hand should be made occasionally.E) C) and D)
F) All of the above

Question 3

On the bank's accounting records, customers' accounts are normally shown as

Accepted Answer

A)   debit balances
B)   expenses
C)   an asset
D)   a liabilityE) A) and B)
F) A) and D)

Question 4

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 5

An example of a preventive control is

Accepted Answer

A)   a single person handles the responsibilities for operations, custody of assets, and accounting
B)   separation of the Purchasing Department and Accounting Department personnel
C)   bonding employees who handle cash
D)   accepting payment in currency onlyE) A) and D)
F) A) and C)

Question 6

List the principal advantage of Electronic Funds Transfers.

Accepted Answer

Advantage: more effi...

Question 7

Journal entries based on the bank reconciliation are required in the company's accounts for

Accepted Answer

A)   outstanding checks
B)   deposits in transit
C)   bank errors
D)   book errorsE) A) and B)
F) A) and C)

Question 8

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

Accepted Answer

The answer of You are trying to explain debit and...

Question 9

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Accepted Answer

A) True 
 B)False

Question 10

The bank reconciliation is an important part of the system of internal controls.

Accepted Answer

A) True 
 B)False

Question 11

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

Accepted Answer

A)   invoice
B)   voucher
C)   debit memo
D)   remittance adviceE) A) and D)
F) All of the above

Question 12

List and define each of the five elements of internal control.

Accepted Answer

The answer of List and define each of the five...

Question 13

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Accepted Answer

A)   $14,470
B)   $10,705
C)   $15,095
D)   $15,720E) A) and C)
F) C) and D)

Question 14

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures.
1. Mandatory vacations
2. Personnel policies
3. Report of outside consultants on future market changes

Accepted Answer

1. (c) control proce...

Question 15

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

Accepted Answer

A)   risk assessment
B)   monitoring
C)   proofs and security measures
D)   separating responsibilities for related operationsE) B) and C)
F) A) and D)

Question 16

During a bank reconciliation process,

Accepted Answer

A)   Outstanding checks and deposits in transit are added to the bank statement balance.
B)   Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.
C)   Outstanding checks and deposits in transit are subtracted from the bank statement balance.
D)   Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.E) A) and B)
F) A) and C)

Question 17

The following data were gathered to use in reconciling the bank statement of Build-A-Lot:
  Required:
(1) What is the adjusted balance on the bank reconciliation?
(2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Accepted Answer

(1)
$13,155 as shown below.
Ba...

Question 18

The last custodian of the petty cash fund was hospitalized and you have been asked to take stock of the fund and replenish it. When you receive the fund, it has $299 in cash and receipts as follows:
  The petty cash fund was established to have $800 in it.
Based on what you have found, what journal entry should be recorded to replenish the fund?

Accepted Answer

Office Supplies 295
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Question 19

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) A) and D)
F) B) and D)

Question 20

The bank reconciliation

Accepted Answer

A)   should be prepared by an employee who records cash transactions
B)   is part of the internal control system
C)   is for information purposes only
D)   is sent to the bank for verificationE) C) and D)
F) A) and B)

Exam 7: Sarbanes-Oxley, Internal Control, and Cash

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Correct Answer
verified

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Correct Answer
verified

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Correct Answer
verified
(1)
$13,155 as shown below.
Ba...
View Answer

The bank reconciliation

Correct Answer
verified

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Correct Answer
verified

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

Correct Answer
verified

During a bank reconciliation process,

Correct Answer
verified

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

Correct Answer
verified
1. (c) control proce...
View Answer

List and define each of the five elements of internal control.

Correct Answer
verified

Which of the following is not an internal control activity for cash?

Correct Answer
verified

List the principal advantage of Electronic Funds Transfers.

Correct Answer
verified
Advantage: more effi...
View Answer

On the bank's accounting records, customers' accounts are normally shown as

Correct Answer
verified

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

Correct Answer
verified

The bank reconciliation is an important part of the system of internal controls.

Correct Answer
verified

An element of internal control is

Correct Answer
verified

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

Correct Answer
verified

Correct Answer
verified
Office Supplies 295
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View Answer

An example of a preventive control is

Correct Answer
verified

Journal entries based on the bank reconciliation are required in the company's accounts for

Correct Answer
verified

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

Correct Answer
verified

Exam 7: Sarbanes-Oxley, Internal Control, and Cash

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Correct AnswerverifiedShow Answer

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Correct AnswerverifiedShow Answer

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Correct Answerverified(1)$13,155 as shown below.Ba...View AnswerShow Answer

The bank reconciliation

Correct AnswerverifiedShow Answer

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

Correct AnswerverifiedShow Answer

During a bank reconciliation process,

Correct AnswerverifiedShow Answer

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

Correct Answerverified1. (c) control proce...View AnswerShow Answer

List and define each of the five elements of internal control.

Correct AnswerverifiedShow Answer

Which of the following is not an internal control activity for cash?

Correct AnswerverifiedShow Answer

List the principal advantage of Electronic Funds Transfers.

Correct AnswerverifiedAdvantage: more effi...View AnswerShow Answer

On the bank's accounting records, customers' accounts are normally shown as

Correct AnswerverifiedShow Answer

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

Correct AnswerverifiedShow Answer

The bank reconciliation is an important part of the system of internal controls.

Correct AnswerverifiedShow Answer

An element of internal control is

Correct AnswerverifiedShow Answer

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedOffice Supplies 295Advertisin...View AnswerShow Answer

An example of a preventive control is

Correct AnswerverifiedShow Answer

Journal entries based on the bank reconciliation are required in the company's accounts for

Correct AnswerverifiedShow Answer

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(1)
$13,155 as shown below.
Ba...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1. (c) control proce...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Advantage: more effi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Office Supplies 295
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View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified