|
what is true of internal control? |
one of the major purposes of internal control is to ensure that the assets are safeguarded |
|
what is an objective of internal control |
to encourage employees to follow company policies |
|
reducing expenses to increase operating profit is representative of |
promoting operational efficiency |
|
which is a benefit provided by internal control |
it promotes operational efficiency |
|
which is a requirement of the sarbanes-oxley act |
an outside auditor must issue an internal control report for each public company |
|
which led to the passage of the sarbanes-oxley act |
the accounting scandals of worldcom and enron |
|
which statement is true of the sarbanes oxley act |
the Public Company Accounting Oversight Board oversees the work of auditors of public companies |
|
which statement about internal control is true |
internal auditors ensure that the employees follow company policies |
|
which component of internal control consists of internal and external auditors |
monitoring of controls |
|
before any internal control procedure is initiated, which question must be primarily addressed by a company |
How much benefit will be derived from the cost of the procedure? |
|
which is a key element of good internal control |
having audits at periodic intervals |
|
which describes firewall |
a technique for protecting data |
|
which describes the environment in internal control |
the environment is the "tone at the top" of the business |
|
which describes the risk assessment component of internal control |
a company must identify its risks and take necessary steps to minimize it |
|
which is an attribute of the int cont component "monitoring of controls" |
internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the acctg records are accurate |
|
which is an attribute of the int con procedure – competent reliable and ethical personnel |
the need of training and supervision of employees |
|
which is an attribute of the int con procedure " assignment of responsibilities" ? |
have clearly assigned responsibilities for each position |
|
which illustrates the int con procedure "separation of duties" |
cashiers must not have access to accounting records |
|
which is included in int con procedure documents |
the invoices and orders must be pre-numbered |
|
which is true of int con component "information system" |
only authorized users have access to various parts of the information system |
|
cadmia services hired a new clerk to keep custody of and maintain all equip in the equip yard. the clerk has not yet been adequately trained on the maintenance needs of the equip. which internal con procedure needs strengthening? |
competent, reliable, and ethical personnel |
|
controller at horizon inc needs new computers for acctg dpt. but there are no guidelines specifying whether he can approve purchases of office equip. which internal con procedure needs strengthening? |
assignment of responsibilities |
|
at cadmia, the junior accountant collects checks and cash from customers and records transactions in the journal. the controller approves the journal entires and band reconciliations. treasurer signs checks and approves contracts. which int con procedure is exemplified? |
separation of duties |
|
at insignia, accounting clerk fills out unnumbered purchase order forms for purchases of supplies…….which int con proc needs strengthening |
documents |
|
pharmaceutical company testing drugs to determine possible side effects is part of |
risk assessment |
|
which is an issue that must be addressed in the int cons for e-commerce |
phishing expeditions |
|
a ____ is a security measure designed for e-commerce |
firewall |
|
rearranging plain text messages by a mathematical process is known as |
encryption |
|
2 or more ppl working together to circumvent int cons and defraud a company is known as ____ |
collusion |
|
** which is used by companies to separate cash duties and establish stronger controls over cash receipts |
a lock box system |
|
which is the last step in the daily control over cash receipts by mail |
the controller compares the records of the days bank deposit amt from the treasurer and the debit to cash from the acctg dpt. |
|
system where customers send their checks directly to a post office box that belongs to a bank |
lock box system |
|
in a large comp, the person who is responsible for comparing cash and the bank bal is the |
controller |
|
what is included in a voucher |
invoice number |
|
which item must be examined by the controller or treasurer before signing a check |
purchase order |
|
company check for payment must be signed by |
an employee specifically authorized by the company |
|
sequentially numbered document authorizing a cash payment is known as a |
voucher |
|
which describes a voucher |
a document authorizing payment to a supplier |
|
streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly w the computers of suppliers to automate routine business transactions is known as |
Electronic Data Interchange |
|
which describes a purchase order |
an order to purchase goods from a supplier |
|
which statement describes and invoice from a supplier |
a stmt from the supplier showing the goods purchases and the amt due |
|
which describes a receiving report |
a report showing that the goods have been received in good condition, as ordered |
|
in a good int con system, which sets of documents is required for proper approval of a payment to a supplier |
a receiving report, an invoice, and a purchase order |
|
a document authorizing a cash payment is |
voucher |
|
which is included in the entry to record the replenishment of a petty cash fund |
a credit to cash |
|
petty cash fund was established with a 380 balance. it currently has cash of 40 and petty cash tickets totaling 340. which would be included in the entry to replenish the fund |
a debit to various expenses for 340 (or a credit to cash for 340) |
|
most basic internal control measure for cash |
keeping money in a bank account |
|
deposit receipt is |
retained by the customer as proof of a deposit transaction |
|
which is true of a signature card |
it shows each authorized persons signature for a bank account |
|
when a check is issued, the party being paid the cash is referred to as the |
payee |
|
when a check is issued, the party who is paying the cash is referred to as the |
maker |
|
*** which of the following is a benefit of online banking to a business |
the business can reconcile to the bank’s balance at any time |
|
*** a check was written by a business for 507, but was recorded in the cash payments journal as 705. how would this error be included on the bank reconciliation? |
an addition on the book side |
|
bank recorded a 3000 deposit as 300. how would this info be included on the bank reconciliation |
an addition on the bank side |
|
bank made an EFT payment of a telephone bill on 5000. how would this info be included on the bank reconciliation |
a deduction on the book side |
|
check of 300000 deposited by company was returned to the bank for nonsufficient funds. how is this included on the bank reconciliation |
a deduction on the book side |
|
*** check payment for 656 was incorrectly entered in the cash account as 856. which adjustment needs to be made |
an increase in the book balance. |
|
bank charged service fee of 55. how is this included on the bank reconciliation |
a deduction on the book side |
|
which item requires an adjustment on the bank side of the bank reconciliation |
deposits in transit |
|
which is true of the bank reconciliation |
it should not be prepared by an employee who handles cash transactions |
|
a check for which a makers bank account has inadequate money to pay the check is known as |
nonsuffiecient funds checks |
|
a company’s cash ledger shows an ending bal of 4400. reconciling items included a bookkeeper error of 80 ( 550 check recorded as 630). two outstanding checks totaling 820, service charge of 25, a DIT of 250, and interest rev of 30. what is the adjusted book balance |
4485 |
|
what would be included in the journal to record an NSF check? |
a debit to Accounts Receivable and a credit to cash |
|
which requires an adjusting entry after preparation of the bank reconciliation |
errors made on the books revealed by the bank reconciliation |
|
*** in reconciling a bank stmt, the bank bal is 1500 and the checkbook bal is 2105. which of the following is the most probable reason for the checkbook bal being larger than the bank bal |
a DIT was made at the end of the month. |
|
*** in reconciling a bank stmt, the bank bal is 2100 and the checkbook bal is 2001. which of the following is the most probable reason for the bank bal being larger than the book bal |
there are outstanding checks |
|
*** a check was written by a business for 549, but was recorded erroneously in the cash ledger as 459. how would this error be included on the bank reconciliation |
a deduction on the book side |
|
bank stmt reveals an EFT received from a customer that has not yet been recorded in the ledger. how would this info be included on the bank recon. |
addition on the book side |
|
a ____ is a document explaining the reasons for the diff btwn a depositors cash records and the depositors cash balance in its bank account |
bank reconciliation |
|
*** no journal entries are required for the reconciling items on the bank side because |
those transactions have already been recorded in the company ledger |
|
journal entries are required for the reconciling items on the book side because |
those transactions have not yet been recorded on the company books |
|
bookkeeper of fire steel inc recorded a 1585 check as 15850 in payment of the current months rent. what journal entry is needed to adjust for this errorr in the books of the company |
cash (debit) 14265 rent expense (credit) 14265 |
|
customers check for 1280 was returned for NSF. which journal entry is needed to adjust |
AR (debit) 1280 cash (credit) 1280 |
|
which items are reconciling items on the bank side of the reconciliation |
DIT and OS |
|
cash & cash equivalents are divided by ___ to determine the cash ratio |
total current liabilities |
|
the ____ is a measure of a company’s ability to meet its short-term obligations from cash and cash equivalents |
cash ratio |
|
cash ratios for 4 companys are below: |
pioneer corp (it has the largest cash ratio) |
|
a company has the cash ratio of 2.3. what does this imply? |
the company has an unnecessarily large amount of cash supply |
Share This
Flashcard
