Question 1

What is the name of the law that requires the CEO and CFO to take responsibility for the accuracy of financial statements and also report on the effectiveness of a companys internal control?

a. Sarbanes-Oxley Act

b. Stevens-Smith Act

c. Smith-Oxford Act

d. Saranson-Oxford Act

Question 2

Which of the following is not a weakness of an internal control system?

a. Collusion

b. Human error

c. Technological advances

d. Separation of duties

Question 3

The purpose of completing a bank reconciliation is to:

a. determine the actual balance of the cash account

b. fix the mistakes made by a bank when recording cash transactions

c. make sure all the debits to cash equal all the credits to cash

d. fix the mistakes made by a company when recording cash transactions

Question 4

Which one of the following below is not an element of internal control?

a. information and communication

b. cost-benefit considerations

c. risk assessment

d. monitoring

Question 5

A firm's internal control environment is not influenced by

a. personnel policies

b. management's operating style

c. organizational structure

d. monitoring policies

Question 6

The debit balance in Cash Short and Over at the end of an accounting period is reported as

a. an asset on the balance sheet

b. an expense on the income statement

c. a liability on the balance sheet

d. income on the income statement

Question 7

deposits in transit is included on the bank reconciliation as a(n)

a. addition to the balance per company books

b. deduction from the balance per the company's books

c. addition to the balance per bank statement

d. deduction from the balance per bank statement

Question 8

outstanding checks is included on the bank reconciliation as a(n):

a. deduction from the balance per bank statement

b. deduction from the balance per company's records

c. addition to the balance per company's records

d. addition to the balance per bank statement

Question 9

Cash equivalents:

a. will be converted to cash within 90 days

b. will be converted to cash within 120 days

c. will be converted to cash within two years

d. are illegal in some states

Question 10

A minimum cash balance required by a bank is called:

a. a compensating balance

b. an EFT

c. cash in bank

d. a cash equivalent