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

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Question 1

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To have a strong internal control system,a business must have good administrative controls.Administrative controls include:

A) the reconciliation of the bank statement.
B) the accuracy of the recording procedures.
C) assessing compliance with company policies.
D) maintenance of accurate inventory records.

E) A) and B)
F) All of the above

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C

Question 2

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Explain how "separation of duties" can be used as a deterrent to corruption.

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When duties are separated,the work of on...

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Question 3

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List the internal control procedures that a company should adopt to protect its cash receipts.

Which of the following is not one of the purposes of an internal control system?

While reconciling Snyder Company's bank statement an error was discovered.A $905 cash receipt for the collection of an account receivable was recorded in the company's books as $950.The deposit slip was correct; the error appeared only in the company's accounting records.

How is a business's certified check treated in doing the business's bank reconciliation?

Moreland Ltd.Reported net sales of $10 million and net income of $3 million in 2012.Based on this information,which of the following is an example of a material misstatement on Moreland's 2012 financial statements?

What were the events that led Congress to pass the Sarbanes-Oxley Act of 2002?

A good system of internal controls cannot be overridden by collusion among employees.

In preparing bank reconciliations,typical adjustments to the book balance include

An effective system of internal control is designed to detect the following except for:

While performing the monthly bank reconciliation,the bookkeeper for Rathbun Pool Supply Company made the journal entry for a bank service charge of $49.Which of the following correctly shows the effect of the entry on the financial statements?

Link's entry to record the NSF check will

A financial statement audit is

The following information pertains to the bank reconciliation of January 31,2012 for the Beckett Company: In addition,the reconciliation revealed one error: Check #2146 for $95 was incorrectly recorded in the books for $59. Using the above information,compute the unadjusted book balance.

Which of the following statements concerning internal controls is true?

Osborn Company's unadjusted book balance at June 30,2012 is $7,800.The company's bank statement reveals bank service charges of $45.Two credit memos are included in the bank statement: one for $900 which represents a collection of an account receivable that the bank made for Osborn and one for $10 which represents the amount of interest that Osborn had earned on its interest-bearing checking account in June.Based on this information,Osborn's true cash balance is:

What is a fidelity bond,and what is its purpose?

A business learns about customers' NSF checks through debit memos that are included with the bank statement.

At March 31,Bandstra Co.had a book balance in its cash account of $5,500.At the end of March the company determined that it had outstanding checks of $900,deposits in transit of $600,a bank service charge of $20,and an NSF check from a customer for $280.The true cash balance at March 31 is: