Accounting 2

Front 1

Which of the following is true of internal control?

Back 1

One of the major purposes of internal controlis to ensure that the assets are safeguarded

Front 2

Reducing expenses to increase operating profitis representative of ________.

Back 2

promoting operational efficiency

Front 3

Which of the following is a requirement of the Sarbanes-Oxley Act?

Back 3

An outside auditor must issue an internalcontrol report for each public company

Front 4

Which of the following components of internal control consists of internal and external auditors?

Back 4

monitoring of controls

Front 5

Which of the following is an attribute of the internal control component "monitoring of controls"?

Back 5

Internal auditors monitor company controls to safeguard assets, and external auditors evaluate the controls to ensure that the accounting records are accurate.

Front 6

Which of the following is included in the internal control procedure documents?

Back 6

The invoices and orders must be pre-numbered

Front 7

Which of the following is an issue that must be addressed in the internal controls for e-commerce?

Back 7

Phishing expeditions

Front 8

Two or more people working together to circumvent internal controls and defraud a company is known as ________.

Back 8

Collusion

Front 9

Which of the following is the first step in the purchasing and payment process?

Back 9

The purchaser sends a purchase order to the supplier.

Front 10

Which of the following is included in a voucher?

Back 10

the invoice number

Front 11

A sequentially numbered document authorizing a cash payment is known as a ________.

Back 11

Voucher

Front 12

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as________.

Back 12

Electronic Data Interchange

Front 13

In a good internal control system, which of the following sets of documents is required for proper approval of a payment to a supplier?

Back 13

a receiving report, an invoice, and a purchase order

Front 14

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

Back 14

A credit to cash

Front 15

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund, is known as the ________.

Back 15

Imprest system

Front 16

Which of the following is the most basic internal control measure for cash?

Back 16

Keeping money in a bank account

Front 17

When a check is issued, the party being paid the cash is referred to as the _______

Back 17

payee

Front 18

When a check is issued, the party who is paying the cash is referred to as the ________

Back 18

Maker

Front 19

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?

Back 19

an addition on the book side

Front 20

The bank recorded a $3,000 deposit as $300. How would this information be included on the bank reconciliation?

Back 20

an addition on the bank side

Front 21

The bank made an EFT payment of a telephone bill of $5,000.How would this information be included on the bank reconciliation?

Back 21

a deduction on the book side

Front 22

A check of $300,000, deposited by a company, wasreturned to the bank for nonsufficient funds. How would this information beincluded on the bank reconciliation

Back 22

A deduction on the book side

Front 23

Which of the following items require an adjustment on the bank side of the bank reconciliation

Back 23

Deposits in transit

Front 24

Which of the following is true of the bank reconciliation

Back 24

It should not be prepared by an employee who handles cash transactions

Front 25

Which of the following would be included in the journal to record an NSF check?

Back 25

a debit to Accounts Receivable and a credit to Cash

Front 26

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

Back 26

errors made on the books revealed by the bank reconciliation

Front 27

In reconciling a bank statement, the bank balance is $1,500 and the checkbook balance is $2,105. Which of the following is the most probable reason for the checkbook balance being larger than the bank balance?

Back 27

A deposit in transit was made at the end of the month

Front 28

The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation

Back 28

an addition on the book side

Front 29

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation

Back 29

a deduction on the book side

Front 30

A ________ is a document explaining the reasons for the difference between a depositor's cash records and the depositor's cash balance in its bank account

Back 30

bank reconciliation

Front 31

No journal entries are required for the reconciling items on the bank side because ________.

Back 31

those transactions have already been recorded in the company ledger

Front 32

Journal entries are required for the reconciling items on the book side because ________.

Back 32

those transactions have not yet been recorded on the company books

Front 33

Which of the following items are reconciling items on the bank side of the reconciliation

Back 33

deposit in transit and outstanding checks

Front 34

Which of the following items are reconciling items on the book side of the reconciliation

Back 34

bank service charge and correction of book error

Front 35

Cash and cash equivalents are divided by ________ to determine the cash ratio.

Back 35

total current liabilities

Front 36

The ________ is a measure of a company's ability to meet its short-term obligations from cash and cash equivalents.

Back 36

cash ratio

Front 37

A company has the cash ratio of 2.3. What does this imply?

Back 37

The company has an unnecessarily large amount of cash supply.