Question 1

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Accepted Answer

A debit memo in the ...

Question 2

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

Accepted Answer

A)   Cash.
B)   Accounts Receivable.
C)   Accounts Payable.
D)   Allowance for Doubtful Accounts.E) A) and B)
F) A) and C)

Question 3

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Accepted Answer

The answer of During the reconciliation process,an accountant for Swann...

Question 4

Which of the following situations provides the most likely indication that fraud exists?

Accepted Answer

A)   Exelon Corporation's earnings per share this quarter is 10% higher than last quarter.
B)   Quantum Corporation's sales this year is 20% higher than last year's sales.
C)   Papillon Product Inc.'s profits have increased each for the last 5 years,but its cash reserves have decreased steadily in the same time period.
D)   Bobadilla Bookstores opened 10 new stores during the most recent quarter.E) B) and D)
F) A) and D)

Question 5

Hyperion Company has established internal control policies and procedures in order to achieve the following objectives: (1) Safeguard the company's assets
(2) Assure that the accounting records contain reliable information
(3) Evaluate management performance effectively
(4) Assure that employees comply with company policies
Which of these objectives are primarily achieved by accounting controls?

Accepted Answer

A)   Objectives 1 and 2
B)   Objectives 2 and 3
C)   Objectives 3 and 4
D)   Objectives 1 and 4E) A) and D)
F) None of the above

Question 6

What is a financial statement audit?

Accepted Answer

It is a detailed examination of a compan...

Question 7

Effective internal controls for cash include:

Accepted Answer

A)   making cash payments by prenumbered check.
B)   depositing cash in the bank on a timely basis.
C)   giving written cash receipts to customers as evidence of payment.
D)   all of these.E) A) and B)
F) A) and C)

Question 8

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

Accepted Answer

The Act required establishment of the Pu...

Question 9

The most favorable opinion that an auditor can express is the

Accepted Answer

A)   Unqualified opinion
B)   Qualified opinion
C)   Adverse opinion
D)   DisclaimerE) A) and C)
F) B) and D)

Question 10

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Accepted Answer

A)   subtracted from the unadjusted book balance.
B)   added to the unadjusted bank balance.
C)   subtracted from the unadjusted bank balance.
D)   added to the unadjusted book balance.E) C) and D)
F) All of the above

Question 11

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

Accepted Answer

A) True 
 B)False

Question 12

Krieger Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

Accepted Answer

A)   Choice A
B)   Choice B
C)   Choice C
D)   Choice DE) A) and C)
F) A) and B)

Question 13

The Sarbanes-Oxley Act

Accepted Answer

A)   was prompted by corporate bankruptcies and audit failures.
B)   limits an auditor's ability to provide non-audit services to a client.
C)   clarifies the responsibility of a company's management for its financial statements.
D)   all of these.E) A) and B)
F) C) and D)

Question 14

Which of the following is not considered an accounting control?

Accepted Answer

A)   Performance evaluations of managers.
B)   Requiring employees to take vacations or rotate job duties.
C)   Bonding of employees.
D)   Use of prenumbered documents.E) A) and D)
F) None of the above

Question 15

Effective separation of duties in an organization reduces the likelihood of theft.

Accepted Answer

A) True 
 B)False

Question 16

A bank statement debit memo describes a transaction that increases a customer's account balance.

Accepted Answer

A) True 
 B)False

Question 17

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Accepted Answer

The answer of While reconciling Swanson Company's bank statement an...

Question 18

Which of the following is not a procedure for the control of cash receipts?

Accepted Answer

A)   Immediate preparation of records of all cash receipts.
B)   Giving customers written receipts for all monies paid.
C)   Using prenumbered checks.
D)   Depositing cash in the bank frequently.E) B) and D)
F) None of the above

Question 19

Independent auditors are

Accepted Answer

A)   responsible for discovering fraud
B)   responsible for providing reasonable assurance that financial statements are free of misstatements
C)   responsible for providing absolute assurance that financial statements are free of errors
D)   none of the aboveE) All of the above
F) A) and B)

Question 20

The bank statement for Ronson Company included a debit memo for a bank service charge of $58.
Required:
a)Show the effects of recognizing the bank service charge on the financial statements by recording appropriate amounts in the financial statements model provided.Include dollar amounts of increases and decreases; for cash flow,indicate whether it is an operating activity,investing activity,or financing activity.  b)Is the recognition of the bank service charge an asset source,use,or exchange transaction?

Accepted Answer

a) <img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> b)The bank servi...

Exam 4: Internal Controls,accounting for Cash,and Ethics

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

Correct Answer
verified

What is a financial statement audit?

Correct Answer
verified
It is a detailed examination of a compan...
View Answer

Correct Answer
verified
a) b)The bank servi...
View Answer

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Correct Answer
verified

The Sarbanes-Oxley Act

Correct Answer
verified

The most favorable opinion that an auditor can express is the

Correct Answer
verified

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Correct Answer
verified

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Correct Answer
verified

Which of the following situations provides the most likely indication that fraud exists?

Correct Answer
verified

A bank statement debit memo describes a transaction that increases a customer's account balance.

Correct Answer
verified

Which of the following is not a procedure for the control of cash receipts?

Correct Answer
verified

Correct Answer
verified

Effective separation of duties in an organization reduces the likelihood of theft.

Correct Answer
verified

Which of the following is not considered an accounting control?

Correct Answer
verified

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Correct Answer
verified
A debit memo in the ...
View Answer

Independent auditors are

Correct Answer
verified

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

Correct Answer
verified
The Act required establishment of the Pu...
View Answer

Krieger Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

Correct Answer
verified

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

Correct Answer
verified

Effective internal controls for cash include:

Correct Answer
verified

Exam 4: Internal Controls,accounting for Cash,and Ethics

Effective separation of duties in a business allows the work of one employee to serve as a check on the work of other employees.

Correct AnswerverifiedShow Answer

What is a financial statement audit?

Correct AnswerverifiedIt is a detailed examination of a compan...View AnswerShow Answer

Correct Answerverifieda) b)The bank servi...View AnswerShow Answer

During the reconciliation process,an accountant for Swann Company discovered that the bank deducted from its account a check written by Swan Company (a different company).

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act

Correct AnswerverifiedShow Answer

The most favorable opinion that an auditor can express is the

Correct AnswerverifiedShow Answer

A bank deposit made on June 30 did not appear on the June bank statement.In doing the June bank reconciliation,this deposit in transit should be

Correct AnswerverifiedShow Answer

While reconciling Swanson Company's bank statement an error was discovered.A $394 cash receipt for the collection of an account receivable was recorded in the company's books as $349.The deposit was recorded correctly by the bank.

Correct AnswerverifiedShow Answer

Which of the following situations provides the most likely indication that fraud exists?

Correct AnswerverifiedShow Answer

A bank statement debit memo describes a transaction that increases a customer's account balance.

Correct AnswerverifiedShow Answer

Which of the following is not a procedure for the control of cash receipts?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Effective separation of duties in an organization reduces the likelihood of theft.

Correct AnswerverifiedShow Answer

Which of the following is not considered an accounting control?

Correct AnswerverifiedShow Answer

When a "debit memo" is included in a bank statement,what effect does that have on the cash balance?

Correct AnswerverifiedA debit memo in the ...View AnswerShow Answer

Independent auditors are

Correct AnswerverifiedShow Answer

What were some of the major provisions of the Sarbanes-Oxley Act of 2002?

Correct AnswerverifiedThe Act required establishment of the Pu...View AnswerShow Answer

Krieger Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

Correct AnswerverifiedShow Answer

When a customer's NSF check is returned to a business with its bank statement,the business should make a journal entry increasing

Correct AnswerverifiedShow Answer

Effective internal controls for cash include:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
It is a detailed examination of a compan...
View Answer

Correct Answer
verified
a) b)The bank servi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A debit memo in the ...
View Answer

Correct Answer
verified

Correct Answer
verified
The Act required establishment of the Pu...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified