Chapter 07 – Internal Control and Cash
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Page 21
55. When a firm uses internal auditors, it is adhering to which of the following internal control elements?
a.
risk assessment
b.
monitoring
c.
proofs and security measures
d.
information and communication
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
56. The objectives of internal control are to
a.
control the internal organization of the accounting department personnel and equipment
b.
provide reasonable assurance that assets are safeguarded and used for business purposes, business information
is accurate, and laws and regulations are complied with
c.
prevent fraud, and promote the social interest of the company
d.
provide control over “internal-use only” reports and employee internal conduct
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
57. Which one of the following reflects a weak internal control system?
a.
b.
c.
d.
ANSWER:
d
Chapter 07 – Internal Control and Cash
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Page 24
c.
postage stamps
d.
travelers’ checks
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
63. The cash account in the company’s ledger is a(n)
a.
asset with a normal debit balance
b.
asset with a normal credit balance
c.
liability with a normal debit balance
d.
liability with a normal credit balance
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-03 – LO: 07–03
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.15 – Current Assets Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
64. The portion of an invoice that is returned with payment is a
a.
remittance advice
b.
voucher
c.
debit memo
d.
credit memo
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 26
a.
invoice
b.
voucher
c.
debit memo
d.
remittance advice
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
68. EFT
a.
means Efficient Funds Transfer
b.
can process certain cash transactions at less cost than by using the mail
c.
makes it easier to document purchase and sale transactions
d.
means Effective Funds Transfer
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
69. A voucher is usually supported by
a.
a supplier’s invoice
b.
a purchase order
c.
a receiving report
d.
all of these
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Chapter 07 – Internal Control and Cash
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Page 30
c.
any differences between the company’s records and the bank’s records should be determined, and any errors
made by either party should be discovered and corrected
d.
the bank must make sure that its records are correct
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
77. The bank reconciliation
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 verification
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
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
78. Journal entries based on the bank reconciliation are required in the company’s accounts for
a.
outstanding checks
b.
deposits in transit
c.
bank errors
d.
book errors
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False