• To reconcile a bank statement, _________ must be added to the bank balance because the company has recorded this increase in funds, but the bank has not recorded as of the statement date.

a. outstanding deposits

b. outstanding checks

c. NFS checks

d. interest revenue

• The CEO of Howard Company does not abide by the internal controls that are in place in the company. He does not adhere to several corporate policies and frequently overrides controls related to separation of duties. He openly dismisses the corporate code of conduct. Communication of his disregards for corporate policies affects which component of the internal control?

a. environment

b. risk assessment

c. monitoring of controls

d. information system

• ___________ is NOT a goal of internal controls

a. Producing financial statements that always report profits

b. Safeguarding assets

c. Efficiency and effectiveness in operations

d. Reliable financial reporting

• Interest revenue earned on the account is a reconciling item that is typically ___________ in order to reconcile the book balance to the bank statement.

a. added to the bank balance

b. subtracted from the bank balance

c. added to the book balance

d. subtracted from the book balance

• A system that allows customers' payments to be deposited directly into the bank with no interaction from employees is a(n) __________ system.

a. online banking

b. point of sale

c. voucher

d. lock-box