Question 1

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Minor amount of cash kept on hand.

Accepted Answer

Petty cash is a minor amount of cash kept on hand. A refers to financial instruments that can be easily converted into cash, such as short-term bonds or money market funds. B refers to the process of comparing a company's bank statement with its own accounting records. D and E refer to cards used to make purchases or withdrawals instead of cash.

Question 2

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Lead audit partners are required to change every five years.

Accepted Answer

Auditor rotation is the term that describes the requirement for lead audit partners to change every five years.

Answer: B, D
 Oversight board and corporate executive accountability are terms that describe the external and internal factors that influence the control environment.

Answer: C, G
 Control activities and internal control are terms that refer to the systems and processes in place to help achieve objectives and manage risks.

Answer: E
 Nonaudit services is the term that describes the additional services beyond auditing that a firm may provide to a client.

Answer: J
 Risk assessment is the term that describes the process of identifying and evaluating risks that might affect the achievement of objectives.

Answer: A, H
 Monitoring and information and communication are terms that refer to the ongoing activities that help to maintain and improve internal control systems.

Question 3

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Transfer of data from lower managers to top executives for accurate financial reporting.

Accepted Answer

Information and communication involves the transfer of data from lower managers to top executives for accurate financial reporting. The other terms do not specifically relate to this activity.

Question 4

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Audit firm cannot provide a variety of other services to its client, such as consulting.

Accepted Answer

The term that best fits the phrase "Audit firm cannot provide a variety of other services to its client, such as consulting" is nonaudit services, which refers to services that an audit firm cannot provide to its audit clients in order to maintain independence and objectivity.

Answer: B
 Oversight board refers to a group of individuals responsible for monitoring and overseeing the activities of an organization or industry, such as a regulatory or governance board.

Answer: G
 Internal control refers to the processes and procedures implemented by an organization to ensure the accuracy, completeness, and reliability of its financial reporting and to safeguard its assets from misuse or loss.

Answer: D
 Corporate executive accountability refers to the responsibility of senior management and board members to ensure that an organization is operating in a legal and ethical manner and to be accountable for any financial reporting or governance failures.

Answer: J
 Risk assessment refers to the process of identifying, analyzing, and managing risks that may affect an organization's financial reporting or operations.

Question 5

What is internal control? Briefly describe the five components of internal control outlined by the Committee of Sponsoring Organizations (COSO).

Accepted Answer

The answer of What is internal control? Briefly describe the...

Question 6

A company uses the following process for its cash receipts. At the end of each day, the secretary places all cash and checks received from customers in a desk drawer. Each Monday, the secretary totals all amounts received, records this in the accounting records, and deposits the money in the bank account. Then, once every three months, the office manager requests information from the bank necessary to prepare a bank reconciliation. Discuss the company's internal control procedures related to cash receipts.

Accepted Answer

The answer of A company uses the following process for...

Question 7

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Formal policies to evaluate internal and external threats to achieving company objectives.

Accepted Answer

The answer of Listed below are ten terms followed by...

Question 8

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Executives must personally certify the financial statements.

Accepted Answer

The phrase "Executives must personally certify the financial statements" refers to the requirement of corporate executive accountability, where CEOs and CFOs are required to personally certify the accuracy and completeness of financial reports.

Question 9

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Withdraws funds directly from the user's account at the time of use.

Accepted Answer

Debit cards withdraw funds directly from the user's bank account at the time of use. Cash equivalent refers to items that can be easily converted to cash, such as money orders or traveler's checks. Bank reconciliation is the process of comparing a company's records to bank statements to ensure accuracy. Petty cash is a small amount of cash kept on hand for minor expenses. Credit cards allow the user to borrow money to make purchases, which must be paid back later with interest.

Question 10

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Routine activities that are meant to continually observe internal control activities.

Accepted Answer

The answer of Listed below are ten terms followed by...

Question 11

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Procedures for maintaining separation of duties.

Accepted Answer

The answer of Listed below are ten terms followed by...

Question 12

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Overall attitude of the company with respect to internal controls.

Accepted Answer

The overall attitude of the company with respect to internal controls is referred to as the control environment.

Answer: J
 Risk assessment is the process of identifying, analyzing, and evaluating the risks that may affect the achievement of an organization's objectives.

Answer: C
 Control activities are the policies and procedures designed to provide reasonable assurance that the organization's objectives are met.

Answer: D
 Corporate executive accountability refers to the responsibility of senior executives for the effectiveness of the organization's internal controls.

Answer: H
 Information and communication are the processes and systems used to collect, store, process, and communicate information needed to achieve the organization's objectives.

Question 13

A company had the following transactions:
1. Paid $150 for office supplies using a debit card.
2. Purchased office equipment costing $700 using a credit card.
3. Paid utilities bill of $400 by issuing a check.
Record each transaction.

Accepted Answer

The answer of A company had the following transactions:
1. Paid...

Question 14

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Short-term investments that have a maturity date no longer than three months from the date of purchase.

Accepted Answer

Short-term investments that have a maturity date no longer than three months from the date of purchase are known as cash equivalents.

Question 15

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Management must document the effectiveness of procedures that could affect financial reporting.

Accepted Answer

The phrase "Management must document the effectiveness of procedures that could affect financial reporting" describes the term "Internal control," which refers to the processes and procedures implemented by management to provide reasonable assurance that objectives related to financial reporting are achieved.

Question 16

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ PCAOB establishes standards related to the preparation of audited financial reports.

Accepted Answer

The Oversight board is the PCAOB, which establishes standards related to the preparation of audited financial reports.

Answer: D
 Corporate executive accountability refers to the responsibility of top management to establish and maintain effective internal control over financial reporting.

Answer: G
 Internal control refers to the policies and procedures put in place to ensure that a company's financial information is accurate and reliable.

Answer: I
 Auditor rotation is the practice of periodically replacing external auditors to ensure independence and impartiality in the audit process.

Answer: J
 Risk assessment involves identifying and evaluating the risks that could affect a company's financial reporting and implementing controls to mitigate those risks.

Question 17

Discuss the events leading up to the passage of the Sarbanes-Oxley Act and its major provisions.

Accepted Answer

The answer of Discuss the events leading up to the...

Question 18

A company had the following sales transactions:
1. Total debit card sales = $200,000.
2. Total credit card sales = $400,000.
3. Total cash sales = $800,000.
4. Total check sales = $100,000.
There is a charge of 2% on all credit card transactions. Calculate total sales revenue recorded for the year.

Accepted Answer

$200,000 + $400,000 + $800,000 + $100,000 = $1,500,000.

Question 19

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Allows users to purchase items without having to pay cash immediately.

Accepted Answer

Credit cards allow users to make purchases and pay for them later, typically with interest. Debit cards are linked to a checking account and immediately deduct the purchase amount from the account. Cash equivalents are investments that can easily be turned into cash, such as money market funds. Bank reconciliation is the process of matching a company's records to its bank statement. Petty cash is a small amount of cash kept on hand for minor expenses.

Question 20

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Matches the balance of cash in the bank account with the balance of cash in the company's own records.

Accepted Answer

Bank reconciliation matches the balance of cash in the bank account with the balance of cash in the company's own records. Petty cash refers to a small amount of cash kept on hand for small expenses, while cash equivalent refers to highly liquid and safe assets such as treasury bills. Debit and credit cards are payment methods, but do not involve reconciling balances.

Quiz 4: Cash and Internal Controls

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Minor amount of cash kept on hand.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Lead audit partners are required to change every five years.

What is internal control? Briefly describe the five components of internal control outlined by the Committee of Sponsoring Organizations (COSO).

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Executives must personally certify the financial statements.

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Withdraws funds directly from the user's account at the time of use.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Procedures for maintaining separation of duties.

Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Overall attitude of the company with respect to internal controls.

A company had the following transactions: 1. Paid $150 for office supplies using a debit card. 2. Purchased office equipment costing $700 using a credit card. 3. Paid utilities bill of $400 by issuing a check. Record each transaction.

Discuss the events leading up to the passage of the Sarbanes-Oxley Act and its major provisions.

A company had the following sales transactions: 1. Total debit card sales = $200,000. 2. Total credit card sales = $400,000. 3. Total cash sales = $800,000. 4. Total check sales = $100,000. There is a charge of 2% on all credit card transactions. Calculate total sales revenue recorded for the year.

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Allows users to purchase items without having to pay cash immediately.