Question 1

When there is proper segregation of duties,the likelihood of fraud is reduced so that an employee attempting to carry out a fraudulent scheme would have to work in ____________________ with another employee.

Accepted Answer

The answer of When there is proper segregation of duties,the...

Question 2

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list.
-segregation of duties

Accepted Answer

Segregation of duties involves dividing responsibilities among different employees or departments to reduce the risk of error or fraud. This is best exemplified by separating the accounting functions from cash collections to prevent any single person from having control over both recording and handling cash, which could lead to misappropriation of funds.

Question 3

Business process risk assessment is designed to identify,analyze,and manage possible threats to the organization's success concerning ____________________ forces such as resource allocations.

Accepted Answer

The answer of Business process risk assessment is designed to...

Question 4

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-customer's NSF cheque returned with the bank statement

Accepted Answer

A customer's NSF (Non-Sufficient Funds) cheque returned with the bank statement would be a subtraction from the company balance, as the company would have previously recorded this cheque as a deposit, increasing their book balance. When the cheque is returned NSF, the company needs to reverse this entry, decreasing their book balance.

Question 5

The account used to record the discrepancies that will occasionally occur between the amounts deposited and amounts shown on cash register tapes is called ____________________.

Accepted Answer

The answer of The account used to record the discrepancies...

Question 6

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-cheque written on the company's account in May,paid by the bank,and returned with the bank statement

Accepted Answer

The cheque has already been paid by the bank and returned with the bank statement, so it is already accounted for and does not need to be included in the reconciliation.

Question 7

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-cheque written on the company's account in May that does not appear on the bank statement

Accepted Answer

A cheque written on the company's account that does not appear on the bank statement is considered an outstanding cheque. It should be subtracted from the bank balance during reconciliation.

Question 8

Whenever feasible,cash handling activities and cash record-keeping activities should be assigned to different employees,according to the internal control activity called ____________________.

Accepted Answer

The answer of Whenever feasible,cash handling activities and cash record-keeping...

Question 9

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list.
-clearly defined authority and responsibility

Accepted Answer

Clearly defined authority and responsibility align with specific approval given by management for the performance of activities, as it involves delineating who has the authority to make decisions and take actions within an organization.

Question 10

The elapsed time between the purchase of goods for resale and the collection of cash from customers is referred to as the ____________________ cycle.

Accepted Answer

The answer of The elapsed time between the purchase of...

Question 11

Under the ____________________ Act,management of publicly-traded corporations has increased responsibility for a system of internal controls that ensures reliability of financial statements.

Accepted Answer

The answer of Under the ____________________ Act,management of publicly-traded corporations...

Question 12

The practices of delaying payments to suppliers,speeding up collection from customers,and earning the greatest possible return on any excess cash are known as ____________________ principles.

Accepted Answer

The answer of The practices of delaying payments to suppliers,speeding...

Question 13

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-bank service charge on the bank statement for new cheques

Accepted Answer

Bank service charges shown on the bank statement for new checks are expenses for the company that have not yet been recorded in the company's books. Therefore, they should be subtracted from the company's balance to reconcile the company's records with the bank statement.

Question 14

Strategic risk assessment is designed to identify,analyze,and manage possible threats to the organization's success concerning ____________________ forces such as competitors,customers,suppliers,and PEST factors.

Accepted Answer

The answer of Strategic risk assessment is designed to identify,analyze,and...

Question 15

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list.
-adequate documents and records

Accepted Answer

Adequate documents and records are best matched with ensuring that the initial entry into the accounting system is from a consistent source with complete information, as this ensures the accuracy and completeness of the records.

Question 16

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-interest earned on the chequing account for May

Accepted Answer

Interest earned on the checking account is an addition to the company's balance because it increases the amount of money the company has in its account.

Question 17

An internal control activity that separates responsibilities so that no one person handles all the tasks for a particular activity is referred to as ____________________.

Accepted Answer

The answer of An internal control activity that separates responsibilities...

Question 18

The foundation of the internal control system is the control _____________ - the collection of environmental factors that influence the effectiveness of control procedures.

Accepted Answer

The answer of The foundation of the internal control system...

Question 19

A cost-cutting measure used in many business organizations is the use of a(n)____________________ fund,whereby a custodian handles disbursements and documentation for small expenditures.

Accepted Answer

The answer of A cost-cutting measure used in many business...

Question 20

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
-customer's cheque deposited on May 31 but not included on the bank statement

Accepted Answer

This item represents a deposit in transit, meaning it was recorded by the company but not yet by the bank. Therefore, it should be added to the bank balance on the reconciliation to match the company's records.

Quiz 2: Internal Control and Cash

When there is proper segregation of duties,the likelihood of fraud is reduced so that an employee attempting to carry out a fraudulent scheme would have to work in ____________________ with another employee.

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list. -segregation of duties

Business process risk assessment is designed to identify,analyze,and manage possible threats to the organization's success concerning ____________________ forces such as resource allocations.

MATCHING The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.) -customer's NSF cheque returned with the bank statement

The account used to record the discrepancies that will occasionally occur between the amounts deposited and amounts shown on cash register tapes is called ____________________.

Whenever feasible,cash handling activities and cash record-keeping activities should be assigned to different employees,according to the internal control activity called ____________________.

Choose the proper category of internal control activities that best matches the following actions. Each action should be matched with a different numbered item within the internal controls list. -clearly defined authority and responsibility