Question 1

A petty cash fund should be replenished

Accepted Answer

A)  every day.
B)  at the end of every accounting period.
C)  once a year.
D)  as soon as an expense is paid from the fund.E) B) and D)
F) All of the above

Question 2

The principles of internal control activities are used in the

Accepted Answer

A)  U.S.but not globally.
B)  internationally but not in the U.S.
C)  in the U.S.and Canada but not globally.
D)  globally.E) None of the above
F) C) and D)

Question 3

The use of remittance advices for mail receipts is an example of

Accepted Answer

A)  documentation procedures.
B)  other controls.
C)  physical controls.
D)  independent internal verification.E) All of the above
F) A) and D)

Question 4

The petty cash fund eliminates the need for a bank checking account.

Accepted Answer

A) True 
 B)False

Question 5

In large companies, the independent internal verification procedure is often assigned to

Accepted Answer

A)  computer operators.
B)  management.
C)  internal auditors.
D)  outside CPAs.E) A) and D)
F) A) and C)

Question 6

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following items would not be considered cash?

Accepted Answer

A)  Coins
B)  Money orders
C)  Currency
D)  Postdated checksE) A) and B)
F) A) and C)

Question 8

Which one of the following is not an objective of a system of internal controls?

Accepted Answer

A)  Safeguard company assets
B)  Overstate liabilities in order to be conservative
C)  Enhance the accuracy and reliability of accounting records
D)  Reduce the risks of errorsE) C) and D)
F) B) and C)

Question 9

A bank statement

Accepted Answer

A)  lets a depositor know the financial position of the bank as of a certain date.
B)  is a credit reference letter written by the depositor's bank.
C)  is a bill from the bank for services rendered.
D)  shows the activity which increased or decreased the depositor's account balance.E) A) and B)
F) A) and C)

Question 10

A remittance advice attached to a company check provides

Accepted Answer

A)  details about the running cash balance in the checking account.
B)  the magnetic bank routing numbers.
C)  the explanation of the purpose of the check.
D)  the signature space for the maker.E) A) and B)
F) All of the above

Question 11

A segregation of duties among employees eliminates the possibility of collusion.

Accepted Answer

A) True 
 B)False

Question 12

At June 30, Yaddof Company has the following bank information: cash balance per bank $1,800; outstanding checks $340; deposits in transit $275; credit memo for interest $75; bank service charge $10. What is Mareska's adjusted cash balance on June 30?

Accepted Answer

A)  $1,735
B)  $1,800
C)  $1,810
D)  $1,865E) C) and D)
F) A) and B)

Question 13

Management is responsible for establishing a system of internal control.

Accepted Answer

A) True 
 B)False

Question 14

A petty cash fund is generally established in order to

Accepted Answer

A)  pay for all merchandise purchased on account.
B)  pay employees' wages.
C)  make loans internally to employees.
D)  pay relatively small expenditures.E) C) and D)
F) A) and B)

Question 15

The principles of internal control include all of the following except

Accepted Answer

A)  establishment of responsibility.
B)  combining of duties.
C)  physical, mechanical, and electronic controls.
D)  independent internal verification.E) A) and B)
F) A) and C)

Question 16

Collusion may result when one individual circumvents prescribed controls and may significantly impair the effectiveness of a system.

Accepted Answer

A) True 
 B)False

Question 17

Electronic Funds Transfer (EFT) is a disbursement system that uses telephone or computer to transfer cash from one location to another.

Accepted Answer

A) True 
 B)False

Question 18

In preparing its bank reconciliation for the month of April 2015, Delano, Inc. has available the following information.  What should be the adjusted cash balance at April 30, 2015?

Accepted Answer

A)  $77,260.
B)  $77,600.
C)  $78,020.
D)  $78,200.E) A) and B)
F) A) and C)

Question 19

A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93. The entry to replenish the fund would

Accepted Answer

A)  credit Cash Over and Short for $3.
B)  credit Miscellaneous Revenue for $3.
C)  debit Cash Over and Short for $3.
D)  debit Miscellaneous Expense for $3.E) A) and C)
F) B) and C)

Question 20

Which of the following would not be reported on the balance sheet as a cash equivalent?

Accepted Answer

A)  Money market fund
B)  Sixty-day certificate of deposit
C)  Six-month Treasury bill
D)  Money market savings certificateE) A) and D)
F) A) and C)

Exam 7: Fraud, Internal Control, and Cash

A remittance advice attached to a company check provides

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The principles of internal control activities are used in the

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The principles of internal control include all of the following except

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Management is responsible for establishing a system of internal control.

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Collusion may result when one individual circumvents prescribed controls and may significantly impair the effectiveness of a system.

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At June 30, Yaddof Company has the following bank information: cash balance per bank $1,800; outstanding checks $340; deposits in transit $275; credit memo for interest $75; bank service charge $10. What is Mareska's adjusted cash balance on June 30?

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Which one of the following items would not be considered cash?

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Which of the following would not be reported on the balance sheet as a cash equivalent?

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A petty cash fund is generally established in order to

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A petty cash fund should be replenished

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Electronic Funds Transfer (EFT) is a disbursement system that uses telephone or computer to transfer cash from one location to another.

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A bank statement

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A segregation of duties among employees eliminates the possibility of collusion.

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Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

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Which one of the following is not an objective of a system of internal controls?

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A petty cash fund of $100 is replenished when the fund contains $4 in cash and receipts for $93. The entry to replenish the fund would

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In preparing its bank reconciliation for the month of April 2015, Delano, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2015?

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The use of remittance advices for mail receipts is an example of

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The petty cash fund eliminates the need for a bank checking account.

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In large companies, the independent internal verification procedure is often assigned to

Correct AnswerverifiedShow Answer

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