Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the

1. A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure?

A. The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.

B. No changes would be made since the person paying the bills is different from the person ordering the inventory.

C. The person in accounts payable should generate the purchase order.

D. The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received.

2. There are several elements to internal controls. Which of the following would not address the issue of having cash transactions reported in the accounting records?

A. The person behind the cash register should also be responsible for making price adjustments.

B. One employee would have access to the cash register.

C. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form.

D. Ask customers to report to a manager if they do not receive a sales receipt or invoice.

3. Internal control is said to be the backbone of all businesses. Which of the following is the best description of internal controls?

A. Internal controls and company policies are important to protect and safeguard assets and to protect all company data and are designed to protect the company from fraud.

B. Internal controls ensure that the financial statements published are correct.

C. The only role of internal controls is to protect customer data.

D. Internal controls are designed to keep employees from committing fraud against the company.

4. Which of the following would a fraudster perceive as a pressure?

A. living beyond ones means

B. lack of management oversight

C. everyone does it

D. lack of an internal audit function

5. What is the best way for owners of small businesses to maintain proper internal controls?

A. The owner must have enough knowledge of all aspects of the company and have controls in place to track all assets.

B. Small businesses do not need to worry about internal controls.

C. Small businesses should make one of their employees in charge of all aspects of the company, giving the owner the ability to run the company and generate sales.

D. Only managers need to be concerned about internal controls.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Not For Profit Audit Committee Best Practices

Authors: Warren Ruppel

1st Edition

0471697419, 978-0471697411

More Books

Students also viewed these Accounting questions