1.- Which of the following is used by companies to separate cash duties and establish stronger control over cash receipts?

Select one:

A. an imprest system

B. a lock-box system

C. an encryption system

D. a firewall system

2.- Which of the following components of internal control consists of internal and external auditors?

Select one:

A. control environment

B. monitoring of controls

C. information systems

D. control procedures

3. Which of the following led to the passage of the Sarbanes-Oxley Act?

Select one:

A. the accounting scandals of WorldCom and Enron

B. the stock market crash of 2002

C. the mounting government deficit

D. the savings and loan bailout

4. The bank made an EFT payment of a telephone bill of $5,000. How would this information be included on the bank reconciliation?

Select one:

A. a deduction on the book side

B. an addition on the bank side

C. an addition on the book side

D. a deduction on the bank side

5. The acronym for the five internal control components is CRIME. Select one: True False

6. On January 1, 2015, Anodel Inc. acquired a machine for $1,000,000. The estimated useful life of the asset is 5 years. Residual value at the end of 5 years is estimated to be $50,000. Calculate the depreciation expense per year using the straight-line method.

Select one:

a. $250,000

b. $190,000

c. $240,000

d. $200,000

7.The cost principle requires a business to record the assets acquired or services received at their actual cost.

Select one:

True

False

8. Depreciation is the allocation of a plant asset's cost to expense over the useful life of the asset.

Select one:

True

False

9. When a plant asset, fully depreciated and has no residual value, is discarded, the company will remove the Plant Asset Account and the Accumulated Depreciation Account from their books.

Select one:

True

False

10. An asset is said to be obsolete when a newer asset can perform the job more efficiently.

Select one:

True

False

11. Land and land improvements are one and the same and therefore must be recorded in single account.

Select one:

True

False

12. Which of the following is included in the cost of land?

Select one:

a. cost of fencing

b. cost of outdoor lighting

c. brokerage commission

d. cost of paving

13. Which of the following depreciation methods allocates a varying amount of depreciation each year based on an asset's usage?

Select one:

a. the units-of-production method

b. the annuity method

c. the double-declining-balance method

d. the straight-line method