Quiz
Chapter 7 - Sarbanes Oxley, Internal Control, and Cash
Questions in this quiz (24)
1SarbanesOxley applies to
- APublicly held companies
- Bnot for profit organizations
- Cprivately held businesses
- Dall of these
2"To maintain public confidence and trust in the financial reporting of companies" is the purpose of
- Athe FASB
- Bthe IRS
- CSarbanes Oxley
- DGAAP
3Which one of the following below is NOT an element of internal control?
- Arisk assessment
- Bmonitoring
- Cinformation and communication
- Dcost-benefit considerations
4The objectives of internal control are to
- Acontrol the internal organization of the accounting department personnel and equipment
- Bprovide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with
- Cprevent fraud, and promote the social interest of the company
- Dprovide control over "internal-use only" reports and employee internal conduct
5Which one of the following reflects a weak internal control system?
- Aall employees are well supervised
- Ba single employee is responsible for comparing a receiving report to an invoice
- Call employees must take their vacations
- Da single employee is responsible for collecting and recording of cash
6When a firm uses internal auditors, it is adhering to which of the following internal control elements?
- ARisk Assessment
- BMonitoring
- CProofs and Security Measures
- DInformation and Communication
7The portion of an invoice that is returned with payment is a
- Aremittance advice
- Bvoucher
- Cdebit memo
- Dcredit memo
8A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)
- AInvoice
- BVoucher
- CDebit Memo
- DRemittance Advice
9A voucher is usually supported by
- AA Supplier's invoice
- BA purchase order
- CA receiving report
- DAll of these
10Credit memos from the bank
- Adecrease a bank customer's account
- Bare used to show a bank service charge
- Cshow that a company has deposited a customer's NSF check
- Dshow the bank has collected a note receivable for the customer
11A bank statement
- Ais a credit reference letter written by the company's bank
- Bshows a company the financial position of the bank as of a certain date
- Cis a bill from the bank for services rendered
- Dshows the activity that increased or decreased the company's account balance
12The amount of deposits in transit is included on the bank reconciliation as a(n)
- Adeduction from the balance per the company's books
- Bdeduction from the balance per bank statement
- Caddition to the balance per company books
- Daddition to the balance per bank statement
13Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)
- Aaddition to the balance per company's records
- Bdeduction from the balance per bank statement
- Caddition to the balance per bank statement
- Ddeduction from the balance per company's records
14A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)
- Aaddition to the balance per the company's records
- Baddition to the balance per the bank statement
- Cdeduction from the balance per the bank statement
- Ddeduction from the balance per the company's records
15A bank reconciliation should be prepared periodically because
- Athe company's records and the bank's records are in agreement
- Bthe bank has not recorded all of its transactions
- Cany differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected
- Dthe bank must make sure that its records are correct
16Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is
- Aa deduction from the balance per company's records
- Ban addition to the balance per bank statement
- Ca deduction from the balance per bank statement
- Dan addition to the balance per company's records
17A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n)
- Adeduction from the balance per the company's records
- Baddition to the balance per the bank statement
- Cdeduction from the balance per the bank statement
- Daddition to the balance per the company's records
18Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)
- Adeduction from the balance per company's records
- Baddition to the balance per bank statement
- Cdeduction from the balance per bank statement
- Daddition to the balance per company's records
19Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)
- Adeduction from the balance per company's records
- Baddition to the balance per bank statement
- Cdeduction from the balance per bank statement
- Daddition to the balance per company's records
20The amount of the outstanding checks is included on the bank reconciliation as a(n)
- Adeduction from the balance per company's records
- Baddition to the balance per bank statement
- Cdeduction from the balance per bank statement
- Daddition to the balance per company's records
21Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)
- Adeduction from the balance per company's records
- Baddition to the balance per bank statement
- Cdeduction from the balance per bank statement
- Daddition to the balance per company's records
22Which of the following would be subtracted from the balance per books on a bank reconciliation?
- Aoutstanding checks
- Bdeposits in transit
- Cnotes collected by the bank
- Derror in recording a check for $732 as $723
23Cash equivalents include
- Achecks
- Bcoins and currency
- Cmoney market accounts and commercial paper
- Dstocks and short-term bonds
24Cash equivalents
- Aare illegal in some states
- Bwill be converted to cash within two years
- Cwill be converted to cash within 90 days
- Dwill be converted to cash within 120 days
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- Mahmoud Hemood
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