1. In the Systems understanding Aid, which of the following was not a primary type of control that needed to be understood?

Independent checks

Uses of flowcharts

Authorization of transaction

Adequate documents and records

 

2. Preparing a bank reconciliation is an example of common type of internal control?

Adequate documents and records

Separation of the custody of assets from accounting

Independent checks

Use of flowcharts

 

3. Which cycle begins with an order from a customer?

Payroll cycle

Purchases and cash disbursements cycle

Sales and cash receipts cycle

Inventory cycle

 

4. Which of the following is a primary reason a company’s book value is less than its market value?

Land and buildings are valued at their fair value

Investors tend to be too optimistic about a company’s growth opportunities

Management recording errors

Many valuable resources of the company are not recorded as assets.