Chapter 07 – Internal Control and Cash
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Page 1
1. The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
REFERENCES:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-01 – LO: 07–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.BB.03 – Legal
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Ethics
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
2. Sarbanes-Oxley’s purpose is to maintain public confidence and trust in the financial reporting of companies.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-01 – LO: 07–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.BB.03 – Legal
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Ethics
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
3. There are three internal control objectives and they are to safeguard the company’s reputation, ensure accurate financial
reports, and ensure compliance with applicable laws.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 3
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-02 – LO: 07–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.BB.01 – Industry
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
7. Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control
procedure: separating operations, custody of assets, and accounting.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-02 – LO: 07–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.BB.01 – Industry
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
8. Internal control is enhanced by separating the control of a transaction from the record-keeping function.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-02 – LO: 07–02
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.BB.01 – Industry
ACCT.AICPA.FN.03 – Measurement
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 6
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-03 – LO: 07–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
15. If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an “other income” item
on the income statement.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-03 – LO: 07–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
16. An example of good internal controls over cash payments is the taking of all cash discounts offered.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-03 – LO: 07–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 10
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
26. In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
27. In preparing a bank reconciliation, the amount indicated by a debit memo for bank service charges is added to the
balance per company’s records.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM