highlighted questions

best description of internal controls? 2. LO 8.2 Internal control is said to be the backbone of all businesses. Which of the following is the A. Internal controls ensure that the financial statements published are correct. B. The only role of internal controls is to protect customer data. C. 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. D. Internal controls are designed to keep employees from committing fraud against the company. 3. LO 8.4 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. 4. LO 8.4 Which of the following is not considered to be part of the internal control structure of a company? A. Ensure that assets are kept secure. B. Monitor operations of the organization to ensure maximum efficiency. C. Publish accurate financial statements on a regular basis. D. Ensure assets are properly used. 5. LO 8.4 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. One employee would have access to the cash register. B. The cash drawer should be closed out, and cash and the sales register should be reconciled on a prenumbered form. C. Ask customers to report to a manager if they do not receive a sales receipt or invoice. D. The person behind the cash register should also be responsible for making price adjustments, 8. LO 8.4 Which one of the following documents is not needed to process a payment to a vendor? A. vendor invoice B. packing slip C. check request D. purchase order 9. LO 8.4 What is the advantage of using technology in the internal control system? A. Passwords can be used to allow access by employees. B. Any cash received does not need to be reconciled because the computer tracks all transactions. C. Transactions are easily changed. D. Employees cannot steal because all cash transactions are recorded by the computer/cash register. 10. LO 8.4 Which of the following assets require the strongest of internal controls? A. inventory B. credit cards C. computer equipment D. cash 11. LO 8.5 Which of the following is true about the Sarbanes-Oxley Act? A. It was passed to ensure that internal controls are properly documented and tested by public companies. B. It applies to both public and smaller companies. C. It requires all companies to report their internal control policies to the US Securities and Exchange Commission. D. It does not require additional costs or resources to have adequate controls. 13. LO 8.5 Petty cash is used to A. write checks for frequent purchases B. make small payments in cash C. avoid having to retain receipts because the amounts are very small D. avoid having to get approvals due to the small amount of cash being paid 14. LO 8.5 A company has decided to start a petty cash fund for $150. Which of the following ist correct journal entry? A Petty Cash Cash 150 150 B. 150 Cash Petty Cash 150 C. No entry is required. D. 150 Expenses Petty Cash 150 15. LO 8.6 Which of the following items are found on a book side of the bank reconciliation? A. beginning bank balance B. outstanding checks C. interest income D. error made by bank 16. LO 8.6 Which of the following are found on the bank side of the bank reconciliation? A. NSF check B. interest income C. wire transfer into client's account D. deposit in transit