Question 1

The Sarbanes-Oxley Act of 2002 requires companies to maintain strong and effective internal controls over recording transactions and preparing financial statements.

Accepted Answer

A) True 
 B)False

Question 2

Bank customers are considered owners of the bank,so the bank shows their accounts as an asset on the bank's records.

Accepted Answer

A) True 
 B)False

Question 3

All organizations face risks,and the assessment of these risks is necessary so that the objectives of internal control can be achieved.

Accepted Answer

A) True 
 B)False

Question 4

If a business has several bank accounts,it will have a separate record for each of them.

Accepted Answer

A) True 
 B)False

Question 5

When the petty cash fund is replenished,the petty cash account is adjusted for the total of all expenditures made since the fund was last replenished.

Accepted Answer

A) True 
 B)False

Question 6

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the cash balance per books.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a factor influencing about internal control environment?

Accepted Answer

A)  management's operating style.
B)  organizational behavior.
C)  mandatory vacations.
D)  security measures.E) B) and C)
F) All of the above

Question 8

Using the following information,prepare a bank reconciliation for Hydrope Co.for May 31,2015.

Accepted Answer

Hydrope Co. Bank Reconciliation May 31,2...

Question 9

A voucher:

Accepted Answer

A)  is received from customers to explain the purpose of a payment.
B)  is normally prepared in the Accounting Department.
C)  system is used to control cash receipts.
D)  system is an internal control procedure to verify that the assets in the records are the ones the company owns.E) All of the above
F) C) and D)

Question 10

Which of the following elements of internal control focuses on locating weaknesses and improving control effectiveness?

Accepted Answer

A)  Control environment
B)  Risk assessment
C)  Control procedures
D)  MonitoringE) A) and B)
F) B) and D)

Question 11

Internal control consist of policies and procedures that .

Accepted Answer

A)  involve cost-benefit considerations
B)  deal with human element of controls such as,fatigue,carelessness,etc.
C)  ensure public relations
D)  ensure the accuracy of business informationE) A) and D)
F) B) and C)

Question 12

List the objectives of internal control and give an example of how each is implemented.

Accepted Answer

The objectives of internal control are t...

Question 13

What is the purpose of the Sarbanes-Oxley Act of 2002,and why was it enacted?

Accepted Answer

The Sarbanes-Oxley Act of 2002 was passe...

Question 14

In preparing a bank reconciliation,the amount indicated by a debit memorandum for bank service charges is deducted from the cash balance per bank.

Accepted Answer

A) True 
 B)False

Question 15

Internal control is enhanced by combining the control of a transaction with the record-keeping function.

Accepted Answer

A) True 
 B)False

Question 16

A bank reconciliation should be prepared periodically because:

Accepted Answer

A)  the depositor's records and the bank's records are in agreement.
B)  the bank has not recorded all of its transactions.
C)  any differences between the depositor's records and the bank's records should be determined,and any errors made by either party should be discovered and corrected.
D)  the bank must make sure that its records are correct.E) A) and B)
F) A) and C)

Question 17

A voucher system is an example of an internal control procedure over cash receipts.

Accepted Answer

A) True 
 B)False

Question 18

The bank section begins with the cash balance according to the bank statement and ends with the adjusted balance.

Accepted Answer

A) True 
 B)False

Question 19

Outstanding checks are checks that have been issued but have not cleared by the bank.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following would be added to the cash balance per books on a bank reconciliation?

Accepted Answer

A)  Service charges
B)  Outstanding checks
C)  Deposits in transit
D)  Notes collected by the bankE) B) and C)
F) All of the above

Exam 5: Sarbanes-Oxley, internal Control, and Cash

When the petty cash fund is replenished,the petty cash account is adjusted for the total of all expenditures made since the fund was last replenished.

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the cash balance per books.

Correct AnswerverifiedShow Answer

All organizations face risks,and the assessment of these risks is necessary so that the objectives of internal control can be achieved.

Correct AnswerverifiedShow Answer

List the objectives of internal control and give an example of how each is implemented.

Correct AnswerverifiedThe objectives of internal control are t...View AnswerShow Answer

The bank section begins with the cash balance according to the bank statement and ends with the adjusted balance.

Correct AnswerverifiedShow Answer

If a business has several bank accounts,it will have a separate record for each of them.

Correct AnswerverifiedShow Answer

Which of the following is a factor influencing about internal control environment?

Correct AnswerverifiedShow Answer

Which of the following would be added to the cash balance per books on a bank reconciliation?

Correct AnswerverifiedShow Answer

Using the following information,prepare a bank reconciliation for Hydrope Co.for May 31,2015.

Correct AnswerverifiedHydrope Co. Bank Reconciliation May 31,2...View AnswerShow Answer

Internal control is enhanced by combining the control of a transaction with the record-keeping function.

Correct AnswerverifiedShow Answer

Bank customers are considered owners of the bank,so the bank shows their accounts as an asset on the bank's records.

Correct AnswerverifiedShow Answer

A bank reconciliation should be prepared periodically because:

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act of 2002 requires companies to maintain strong and effective internal controls over recording transactions and preparing financial statements.

Correct AnswerverifiedShow Answer

What is the purpose of the Sarbanes-Oxley Act of 2002,and why was it enacted?

Correct AnswerverifiedThe Sarbanes-Oxley Act of 2002 was passe...View AnswerShow Answer

Outstanding checks are checks that have been issued but have not cleared by the bank.

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount indicated by a debit memorandum for bank service charges is deducted from the cash balance per bank.

Correct AnswerverifiedShow Answer

Which of the following elements of internal control focuses on locating weaknesses and improving control effectiveness?

Correct AnswerverifiedShow Answer

A voucher:

Correct AnswerverifiedShow Answer

Internal control consist of policies and procedures that .

Correct AnswerverifiedShow Answer

A voucher system is an example of an internal control procedure over cash receipts.

Correct AnswerverifiedShow Answer

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The objectives of internal control are t...
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Hydrope Co. Bank Reconciliation May 31,2...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The Sarbanes-Oxley Act of 2002 was passe...
View Answer

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