ACC 556 Week 4 Quiz

ACC 556 Week 4 Quiz | Assignment Help | Strayer University 

Practice Question Paper

Practice Question 02

 Which of the following is not an element of the fraud triangle?

 

o   Opportunity

o   Financial pressure

o   Rationalization

o   Segregation of duties

 

 

Practice Question 03

 Which one of the following is not a primary component of an internal control system?

 

o   Risk assessment

o   Rationalization

o   Information and communication

o   Monitoring

 

 

Practice Question 04

 Which of the following is a reason why an organization establishes a system for internal control?

 

o   To safeguard its assets.

o   To increase efficiency of operations.

o   To ensure compliance with laws and regulations.

o   All of these answer choices are correct.

 

 

Practice Question 07

 Which of the following statements is correct?

 

 

o   Control is most effective when two or three people are given responsibility for the same task.

o   The person who has custody of assets should also perform the record keeping for the assets.

o   It is often a waste of company resources to have an employee perform independent internal verification.

o   The person who has custody of assets should not perform the record keeping for the assets.

 

Practice Question 08

Internal auditors

 

o   Are employees of the IRS who evaluate the internal controls of companies filing tax returns.

o   Are hired by CPA firms to audit business firms.

o   Cannot evaluate the system of internal controls of the company that employs them because they are not independent.

o   Evaluate the system of internal controls for the companies that employ them.

 

 

Practice Question 13

 Which one of the following statements is correct?

o   The public accountants conducting annual audits are responsible for continuous evaluations of a company’s system of internal control.

o   Only large companies employ internal auditors and utilize a system of internal controls.

o   External auditors are company employees who evaluate the effectiveness of the company’s system of internal control on a continuous basis.

o   Internal auditors are company employees who evaluate the effectiveness of the company’s system of internal control on a continuous basis.

 

Practice Question 17

 Which of the following was not a result of the Sarbanes-Oxley Act?

 

o   The Public Company Accounting Oversight Board was created to establish auditing standards and regulate auditor activity.

o   All publicly traded companies must maintain adequate internal controls.

o   Corporate executives and board of directors must ensure that controls are reliable and effective, and they can be fined or imprisoned for failure to do so.

o   Companies must file financial statements with the Internal Revenue Service.

 

 

 

Practice Question 20

 Aptara Construction Supplies has a cashier who is also the accounts receivable clerk for the company. Which internal control principle is violated?

 

o   Rotating employee duties

o   Documentation procedures

o   Establishment of responsibility

o   Segregation of duties

 

 

Practice Question 19

 Handly Inc. permits only designated personnel such as cashiers to handle cash receipts. What principle is being applied?

 

o   Establishment of responsibility

o   Independent internal verification

o   Rotation of employees

o   Segregation of duties

 

 

Practice Question 18

 Which one of the following control activities is relevant when a company uses a computerized (rather than manual) accounting system?

 

o   Establishment of responsibility.

o   Segregation of duties.

o   Independent internal verification.

o   All of these answer choices are correct.

 

Practice Question 21

 Which internal control principle is most important in a control system for handling cash receipts?

 

o   Physical controls

o   Segregation of duties

o   Documentation procedures

o   Independent internal verification

 

 

Practice Question 22

 Which one of the following is not a control procedure used for over-the-counter receipts?

 

o   A cash register’s tape is locked in the register and only a supervisor can access it.

o   Use of a cash register where the amount rung up is clearly visible to the customer.

o   Pre-numbered checks are used to buy supplies.

o   Providing the customers with an itemized receipt.

 

Practice Question 26

 Deposits in transit are added to the cash balance per books on the bank reconciliation.

 

o   True

o   False

 

 

 

 

 

 

 

Practice Question 27

For which item below might a bank issue a credit memorandum to a depositor's account?

 

o   An NSF check

o   Outstanding checks

o   Interest earned

o   Monthly service charges

 

 

Practice Question 29

 Springer Company listed outstanding checks totaling $4,500 on its September bank reconciliation. In October, the company issued checks totaling $45,700. The October bank statement shows that checks totaling $39,800 cleared the bank. In addition, a check from one of Springer's customers in the amount of $500 was returned as NSF. The outstanding checks on the October bank reconciliation should total

 

o   $1,400.

o   $10,400.

o   $5,900.

o   $9,900.

 

 

Practice Question 30

 Jones Company collected the following information to prepare its May bank reconciliation:

Cash balance per books, May 31   $5,300

Deposits in transit    510

Notes receivable with interest collected by bank           580

Bank service charges           30

Outstanding checks 180

NSF check     150

 

How much is the adjusted cash balance per books on May 31?

 

o   $5,660

o   $5,700

o   $5,810

o   $6,210

 

 

Practice Question 32

 For which of the following will an adjusting entry be required as the result of a bank reconciliation?

 

o   Deposits in transit

o   Bank errors

o   NSF checks

o   Outstanding checks

 

 

Practice Question 34

 Which is the adjusting entry Max Company would prepare when the bank collects a $200 note receivable from one of Max’s customers?

 

 

o   Cash               200                

                        Notes Receivable                                         200

 

 

o   Cash               200                

                  Sales Revenues                                       200

 

 

o   Account Payable                  200                

                       Cash                                        200

 

 

o   Cash               200                

                   Customer funds                                     200

 

 

Practice Question 35

 Which of the following is the correct adjusting entry for the account holder when the bank submits a debit memorandum for a monthly service charge of $30?

 

 

o   Cash               30                   

                    Bank Service Fee                                             30

 

 

o   Cash               30                   

                       Account Revenues                                        30

 

 

o   Miscellaneous Expense                  30                   

                           Cash                                                30

 

 

o   Loss on Bank Transactions                        30                   

                                Cash                                                        30

 

Practice Question 37

 As used in a bank reconciliation, how are deposits in transit handled?

 

o   Added to the bank balance

o   Deducted from the book balance

o   Added to the book balance

o   Deducted from the bank balance

 

Practice Question 36

 Which one of the statements below is true?

 

o   Deposits in transit are deducted from the balance per the bank statement, and outstanding checks are added to the balance per the bank statement during the bank reconciliation process.

o   Both deposits in transit and outstanding checks are added to the balance per the bank statement during the bank reconciliation process.

o   The deposits in transit are added to the balance per the bank statement, and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process.

o   Both deposits in transit and outstanding checks are deducted from the balance per the bank statement during the bank reconciliation process.

 

 

Practice Question 38

 Why should a bank reconciliation be prepared?

 

o   To make sure employees have not committed fraud.

o   To make sure the actual cash balance is the same as the cash received from customers.

o   To explain any difference between the depositor's balance per books and the balance per bank.

o   To explain any difference between the bank deposits and the checks written.

 

 

 

Practice Question 39

 A company’s monthly bank statement shows a collection of a note receivable by the bank in the amount of $500. Which of the following is one part of the journal entry needed to record the note collection by the company?

 

o   Debit to Notes Receivable for $500

o   Credit to Cash for $500

o   Credit to Note Expense for $500

o   Credit to Notes Receivable for $500

 

 

Practice Question 40

 If cash is restricted as to its use, and is expected to be used within the next year, how is it reported?

 

o   Reported as a noncurrent asset on the balance sheet.

o   Reported as a current liability on the balance sheet.

o   Reported as a current asset separate from Cash and Cash Equivalents on the balance sheet.

o   Included in the Cash and Cash Equivalents line on the balance sheet.

 

 

Practice Question 41

 A company has the following items at year end: cash on hand, $1,000; cash in a checking account, $3,000; cash in a savings account, $5,000; postage stamps, $50; and Treasury bills, $10,000 that mature in less than 90 days. How much should the company report as cash and cash equivalents on its balance sheet?

 

o   $9,050

o   $19,050

o   $9,000

o   $19,000