Question 1

In a company's bank reconciliation, an outstanding check is a check that:

Accepted Answer

A)   is guaranteed for payment by the bank.
B)   has been issued by the company but has not been presented to the bank for payment.
C)   has been presented to the bank for payment but has not been reported on the bank statement.
D)   has been written for an amount that is greater than the balance in the account holder's bank account.E) A) and D)
F) A) and C)

Question 2

Indicate whether each of the following statements about internal control and ethics is true or false.
-The importance of ethical conduct is recognized across a broad spectrum of accounting organizations

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements accurately describes a fidelity bond?

Accepted Answer

A)   Insurance that the company buys to protect itself from loss due to employee dishonesty.
B)   Proper procedures for processing accounting transactions.
C)   Procedures to provide reasonable assurance that the objectives of a company are accomplished.
D)   Guidelines that limit the actions and authority of different levels of management.E) All of the above
F) B) and D)

Question 4

Indicate whether each of the following statements about internal control and ethics is true or false.
-An internal control system consists of policies and procedures that reduce opportunities for fraud

Accepted Answer

A) True 
 B)False

Question 5

Indicate whether each of the following statements regarding internal control is true or false.
-Cash is most susceptible to embezzlement at the points of receipt and disbursement

Accepted Answer

A) True 
 B)False

Question 6

In performing the bank reconciliation for Bounds Company, a company employee found that the bank had collected one of the company's notes receivable in the amount of $2,000 and had deposited this amount in the company's account at the bank. This amount did not include interest.

Accepted Answer

The answer of In performing the bank reconciliation for Bounds...

Question 7

The qualified opinion is the most favorable opinion that can be expressed by an independent auditor.

Accepted Answer

A) True 
 B)False

Question 8

What is a fidelity bond, and what is its purpose?

Accepted Answer

A fidelity bond is an insuranc...

Question 9

Indicate whether each of the following statements regarding internal controls is true or false.
-It is against the basic rules of internal control to require employees to take regular vacations

Accepted Answer

A) True 
 B)False

Question 10

Which of the item(s)  would be added to the company's unadjusted book balance to determine the true cash balance?

Accepted Answer

A)   Item numbers 5 and 6
B)   Item number 2
C)   Item numbers 1 and 3
D)   Item number 5E) C) and D)
F) All of the above

Question 11

What documentation issued by a bank increases a company's checking account balance at the bank?

Accepted Answer

A)   an account invoice
B)   a debit memo
C)   a credit memo
D)   a certified checkE) All of the above
F) B) and D)

Question 12

Indicate whether each of the following statements regarding internal controls is true or false.
-Administrative controls are composed of policies and procedures that are designed to safeguard assets and assure that accounting records contain reliable information

Accepted Answer

A) True 
 B)False

Question 13

Indicate whether each of the following statements about cash payments is true or false.
-The person who signs a business's checks should make the journal entry to record the payment of cash

Accepted Answer

A) True 
 B)False

Question 14

In preparing a bank reconciliation, is an outstanding check an adjustment to the book balance, the bank balance, or neither?

Accepted Answer

The answer of In preparing a bank reconciliation, is an...

Question 15

Indicate whether each of the following statements about separation of duties is true or false.
-When a company has achieved an effective separation of duties, collusion among employees would be required to commit theft or fraud and avoid detection

Accepted Answer

A) True 
 B)False

Question 16

Indicate whether each of the following statements about internal control and ethics is true or false.
-The use of safety deposit boxes is a common feature of an effective internal control system

Accepted Answer

A) True 
 B)False

Question 17

Indicate whether each of the following statements about separation of duties is true or false.
-One employee should not be responsible for both making cash sales to customers and recording the transaction in the business's accounting records

Accepted Answer

A) True 
 B)False

Question 18

The following are features of an internal control system except

Accepted Answer

A)   Bonding employees to recover losses through insurance
B)   Establishing proper procedures for processing transactions
C)   Mandatory retirement at the age of 65
D)   Hiring and training competent employeesE) None of the above
F) B) and C)

Question 19

In a bank reconciliation, a customer's NSF check included with the bank statement is:

Accepted Answer

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

Question 20

What internal control procedures should a business adopt with respect to cash payments?

Accepted Answer

Payments should be made by check, using ...

Exam 4: Internal Controls, Accounting for Cash, and Ethics

Indicate whether each of the following statements about internal control and ethics is true or false. -An internal control system consists of policies and procedures that reduce opportunities for fraud

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements about internal control and ethics is true or false. -The importance of ethical conduct is recognized across a broad spectrum of accounting organizations

Correct AnswerverifiedShow Answer

In a company's bank reconciliation, an outstanding check is a check that:

Correct AnswerverifiedShow Answer

The following are features of an internal control system except

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements about separation of duties is true or false. -When a company has achieved an effective separation of duties, collusion among employees would be required to commit theft or fraud and avoid detection

Correct AnswerverifiedShow Answer

Which of the item(s) would be added to the company's unadjusted book balance to determine the true cash balance?

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements regarding internal controls is true or false. -It is against the basic rules of internal control to require employees to take regular vacations

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements regarding internal control is true or false. -Cash is most susceptible to embezzlement at the points of receipt and disbursement

Correct AnswerverifiedShow Answer

In a bank reconciliation, a customer's NSF check included with the bank statement is:

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements about separation of duties is true or false. -One employee should not be responsible for both making cash sales to customers and recording the transaction in the business's accounting records

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements regarding internal controls is true or false. -Administrative controls are composed of policies and procedures that are designed to safeguard assets and assure that accounting records contain reliable information

Correct AnswerverifiedShow Answer

What internal control procedures should a business adopt with respect to cash payments?

Correct AnswerverifiedPayments should be made by check, using ...View AnswerShow Answer

What documentation issued by a bank increases a company's checking account balance at the bank?

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation, is an outstanding check an adjustment to the book balance, the bank balance, or neither?

Correct AnswerverifiedShow Answer

What is a fidelity bond, and what is its purpose?

Correct AnswerverifiedA fidelity bond is an insuranc...View AnswerShow Answer

Indicate whether each of the following statements about internal control and ethics is true or false. -The use of safety deposit boxes is a common feature of an effective internal control system

Correct AnswerverifiedShow Answer

In performing the bank reconciliation for Bounds Company, a company employee found that the bank had collected one of the company's notes receivable in the amount of $2,000 and had deposited this amount in the company's account at the bank. This amount did not include interest.

Correct AnswerverifiedShow Answer

The qualified opinion is the most favorable opinion that can be expressed by an independent auditor.

Correct AnswerverifiedShow Answer

Indicate whether each of the following statements about cash payments is true or false. -The person who signs a business's checks should make the journal entry to record the payment of cash

Correct AnswerverifiedShow Answer

Which of the following statements accurately describes a fidelity bond?

Correct AnswerverifiedShow Answer

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Payments should be made by check, using ...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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A fidelity bond is an insuranc...
View Answer

Correct Answer
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