1. Special journals help most by:

Select one:

a. Improving accuracy in posting to subsidiary ledgers

b. Reducing the cost of operating the accounting system

c. Easing the preparation of the financial statements

d. Limiting the number of transactions that have to be recorded

2. The individual accounts in accounts receivable subsidiary ledger identify:

Select one:

a. Payees.

b. Suppliers.

c. Debtors.

d. Amounts to be paid.

3. What control function is performed by auditors?

Select one:

a. Communication of the results of the audit to regulatory agencies.

b. Objective opinion on the fair presentation of the financial statements.

c. Assurance that all transactions are accounted for correctly.

d. Guarantee that company employees have behaved ethically.

4. The bank account serves as a control device over:

Select one:

a. Cash receipts.

b. Cash payments.

c. Both of the above.

d. None of the above.

5. Which of the following is an objective of internal control:

Select one:

a. Safeguarding assets.

b. Maintaining reliable control systems.

c. Preventing and detecting fraud and errors.

d. Optimizing the use of resources.

e. All of the above are objectives of internal control.

6. The best step to ensure good internal controls in the payroll area is:

Select one:

a. Separating payroll duties.

b. Using time cards.

c. Using a payroll bank account.

d. Using a payroll register.

7. The main reason for using a separate payroll bank account is to:

Select one:

a. Safeguard cash by limiting paycheques to amounts based on time cards.

b. Safeguard cash by preventing the writing of payroll cheques to fictitious employees.

c. Increase efficiency by isolating payroll disbursements for analysis and control.

d. All of the above.

8. The total payroll expense of the employer is equal:

Select one:

a. Net pay plus employer payroll taxes and fringe benefits

b. Gross pay plus employees income tax

c. Gross pay plus employer payroll contributions and fringe benefits

d. Net pay plus employee withholdings

9. Which of the following liabilities creates no expense for the company?

Select one:

a. Interest

b. Employment Insurance

c. Warranty

d. Sales tax