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Chapter 7 - Sarbanes Oxley, Internal Control, and Cash

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Mahmoud Hemood
Quiz by Mahmoud Hemood, updated more than 1 year ago
Mahmoud Hemood
Created by Mahmoud Hemood over 6 years ago
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Resource summary

Question 1

Question
SarbanesOxley applies to
Answer
  • Publicly held companies
  • not for profit organizations
  • privately held businesses
  • all of these

Question 2

Question
"To maintain public confidence and trust in the financial reporting of companies" is the purpose of
Answer
  • the FASB
  • the IRS
  • Sarbanes Oxley
  • GAAP

Question 3

Question
Which one of the following below is NOT an element of internal control?
Answer
  • risk assessment
  • monitoring
  • information and communication
  • cost-benefit considerations

Question 4

Question
The objectives of internal control are to
Answer
  • control the internal organization of the accounting department personnel and equipment
  • provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with
  • prevent fraud, and promote the social interest of the company
  • provide control over "internal-use only" reports and employee internal conduct

Question 5

Question
Which one of the following reflects a weak internal control system?
Answer
  • all employees are well supervised
  • a single employee is responsible for comparing a receiving report to an invoice
  • all employees must take their vacations
  • a single employee is responsible for collecting and recording of cash

Question 6

Question
When a firm uses internal auditors, it is adhering to which of the following internal control elements?
Answer
  • Risk Assessment
  • Monitoring
  • Proofs and Security Measures
  • Information and Communication

Question 7

Question
The portion of an invoice that is returned with payment is a
Answer
  • remittance advice
  • voucher
  • debit memo
  • credit memo

Question 8

Question
A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)
Answer
  • Invoice
  • Voucher
  • Debit Memo
  • Remittance Advice

Question 9

Question
A voucher is usually supported by
Answer
  • A Supplier's invoice
  • A purchase order
  • A receiving report
  • All of these

Question 10

Question
Credit memos from the bank
Answer
  • decrease a bank customer's account
  • are used to show a bank service charge
  • show that a company has deposited a customer's NSF check
  • show the bank has collected a note receivable for the customer

Question 11

Question
A bank statement
Answer
  • is a credit reference letter written by the company's bank
  • shows a company the financial position of the bank as of a certain date
  • is a bill from the bank for services rendered
  • shows the activity that increased or decreased the company's account balance

Question 12

Question
The amount of deposits in transit is included on the bank reconciliation as a(n)
Answer
  • deduction from the balance per the company's books
  • deduction from the balance per bank statement
  • addition to the balance per company books
  • addition to the balance per bank statement

Question 13

Question
Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)
Answer
  • addition to the balance per company's records
  • deduction from the balance per bank statement
  • addition to the balance per bank statement
  • deduction from the balance per company's records

Question 14

Question
A 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)
Answer
  • addition to the balance per the company's records
  • addition to the balance per the bank statement
  • deduction from the balance per the bank statement
  • deduction from the balance per the company's records

Question 15

Question
A bank reconciliation should be prepared periodically because
Answer
  • the company's records and the bank's records are in agreement
  • the bank has not recorded all of its transactions
  • any 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
  • the bank must make sure that its records are correct

Question 16

Question
Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is
Answer
  • a deduction from the balance per company's records
  • an addition to the balance per bank statement
  • a deduction from the balance per bank statement
  • an addition to the balance per company's records

Question 17

Question
A 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)
Answer
  • deduction from the balance per the company's records
  • addition to the balance per the bank statement
  • deduction from the balance per the bank statement
  • addition to the balance per the company's records

Question 18

Question
Receipts 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)
Answer
  • deduction from the balance per company's records
  • addition to the balance per bank statement
  • deduction from the balance per bank statement
  • addition to the balance per company's records

Question 19

Question
Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)
Answer
  • deduction from the balance per company's records
  • addition to the balance per bank statement
  • deduction from the balance per bank statement
  • addition to the balance per company's records

Question 20

Question
The amount of the outstanding checks is included on the bank reconciliation as a(n)
Answer
  • deduction from the balance per company's records
  • addition to the balance per bank statement
  • deduction from the balance per bank statement
  • addition to the balance per company's records

Question 21

Question
Accompanying 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)
Answer
  • deduction from the balance per company's records
  • addition to the balance per bank statement
  • deduction from the balance per bank statement
  • addition to the balance per company's records

Question 22

Question
Which of the following would be subtracted from the balance per books on a bank reconciliation?
Answer
  • outstanding checks
  • deposits in transit
  • notes collected by the bank
  • error in recording a check for $732 as $723

Question 23

Question
Cash equivalents include
Answer
  • checks
  • coins and currency
  • money market accounts and commercial paper
  • stocks and short-term bonds

Question 24

Question
Cash equivalents
Answer
  • are illegal in some states
  • will be converted to cash within two years
  • will be converted to cash within 90 days
  • will be converted to cash within 120 days
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