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Exam 4: Cash and Internal Controls

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Question 21

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Investing activities include cash transactions involving revenue and expense events during the period.These are operating activities.

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Question 22

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Which of the following would NOT need to be accounted for in a bank reconciliation?

A) Deposits outstanding recorded by the company but not the bank.
B) Interest earned recorded by the bank but not the company.
C) NSF checks recorded by the bank but not by the company.
D) Checks written by the company and recorded by the bank.

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Question 23

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Which employees have an impact on the operation and effectiveness of internal controls?

Which of the following is not an example of preventive controls?

When a company pays for services received using a check,it should credit Accounts Payable until the check is paid by the bank.The credit is to the Cash account.

A framework for designing an internal control system is provided by the Financial Accounting Standards Board (FASB).A framework for designing an internal control system is provided by the Committee of Sponsoring Organizations (COSO)of the Treadway Commission.

Which of the following best describes the goal of internal controls?

Investing cash flows would include which of the following?

Risk assessment procedures include periodic reviews of internal controls,assessing management's oversight of the internal control,developing solutions to known cases of internal control failures,and determining whether each division or operation within a company is meeting its objectives.

Common types of financial statement fraud include creating fictitious revenues from a fake customer,improperly valuing assets,and mismatching revenues and expenses.

Cash receipts of the company that have not been added to the bank's record of the company's balance are referred to as checks outstanding.These are referred to as deposits outstanding.

The Sarbanes-Oxley Act (SOX) mandates which of the following?

The asset most susceptible to theft is:

Recording all cash receipts as soon as possible is considered a good internal control.

Common examples of cash equivalents include all of the following except:

The petty cash fund represents cash on hand and is used to pay for minor purchases.

Typically,the more volatile the company's trend in operating cash flows,the higher the operating risk of the company.

The three elements of the fraud triangle are:

Which employees are the ones who must take final responsibility for the establishment and success of internal controls?

Under the Sarbanes-Oxley Act,management is responsible for: