Question 1

1. Which of the following does NOT influence a business's control environment?
2. a. proofs and security measurers
3. b. organizational structure
4. c. personnel policies
5. d. management's philosophy and operating style

1 points

Question 2

1. When a firm uses internal auditors, it is adhering to which one of the following internal control elements?
2. a. risk assessment
3. b. separating responsibilities for related operations
4. c. monitoring
5. d. proofs and security measures

1 points

Question 3

1. Which of the following situations reflects a weakness in the internal control system?
2. a. All employees must take their vacations.
3. b. All employees are well supervised.
4. c. A single employee is responsible for collecting and recording of cash.
5. d. A single employee is responsible for comparing a receiving report to an invoice.

1 points

Question 4

1. A firm's internal control environment is NOT influenced by which one of the following?
2. a. personnel policies
3. b. management's operating style
4. c. organizational structure
5. d. monitoring policies

1 points

Question 5

1. Which of the following is an element of internal control?
2. a. risk assessment
3. b. journals
4. c. controlling accounts
5. d. subsidiary ledgers

1 points

Question 6

1. Which of the following is a necessary element of internal control?
2. a. a database
3. b. information and communication
4. c. systems analysis
5. d. systems design

1 points

Question 7

1. What is the debit balance in Cash Short and Over at the end of an accounting period reported as?
2. a. an asset on the balance sheet
3. b. income on the income statement
4. c. an expense on the income statement
5. d. a liability on the balance sheet

1 points

Question 8

1. To reimburse the petty cash fund, which of the following accounts is debited?
2. a. Accounts Receivable
3. b. Cash
4. c. Petty Cash
5. d. various accounts for which the petty cash was disbursed

1 points

Question 9

1. Which of the following should NOT be considered cash by an accountant?
2. a. travellers' cheques
3. b. money orders
4. c. bank chequing accounts
5. d. postage stamps

1 points

Question 10

1. What is the notification accompanying a cheque that indicates the specific invoice being paid?
2. a. a voucher
3. b. a debit memo
4. c. a remittance advice
5. d. a credit memo

1 points

Question 11

1. Which of the following is a special form on which is recorded pertinent data about a liability and the particulars of its payment?
2. a. a debit memo
3. b. an invoice
4. c. a voucher
5. d. a remittance advice

1 points

Question 12

1. Which of the following describes an EFT?
2. a. It makes it easier to document purchase and sale transactions.
3. b. It is an effective funds transfer.
4. c. It is an efficient funds transfer.
5. d. It can process certain cash transactions at less cost than by using the mail.

1 points

Question 13

1. Under the voucher system, when is every transaction recorded?
2. a. at the time of requisitioning
3. b. at the time of paying
4. c. at the time of incurring
5. d. at the time of ordering

1 points

Question 14

1. On the bank's accounting records, how are customers' accounts normally shown?
2. a. as liabilities
3. b. as expenses
4. c. as assets
5. d. as debit balances

1 points

Question 15

1. Which of the following is true regarding the bank reconciliation?
2. a. It is sent to the bank for verification.
3. b. It is part of the internal control system.
4. c. It is for information purposes only.
5. d. It should be prepared by an employee who records cash transactions.

1 points

Question 16

1. Which of the following would be deducted from the balance per books on a bank reconciliation?
2. a. service charges
3. b. outstanding cheques
4. c. notes collected by the bank
5. d. deposits in transit

Question 17

1. What is a minimum cash balance required by a bank called? Page 375
2. a. a compensating balance
3. b. a cash equivalent
4. c. cash in bank
5. d. an EFT

Question 18

1. Expenditures from a petty cash fund are documented by a petty cash receipt.
2. True
3. False

Question 19

1. The petty cash fund eliminates the need for a bank chequing account.
2. True
3. False

Question 20

1. The bank reconciliation is an important part of the system of internal controls.
2. True
3. False