ACCT2101 - SMARTBOOK

Which of the following items are included in cash? Accounts receivable from customers Currency and coins Notes receivable from customers Balance in checking accounts Checks from customers

Currency and coins. Balance in checking accounts Checks from customers

Which of the following is classified as part of the control environment? Identification and analysis of internal and external risk factors Formal procedures for reporting control deficiencies Policies and procedures that help ensure that managements' directives are followed Overall ethical tone of the organization with respect to internal control

Overall ethical tone of the organization with respect to internal control

The Public Company Accounting Reform and Investor Protection Act of 2002 is known as the CPA Investigations Act. SEC Reforms Act. Investor Protection Act. Sarbanes-Oxley Act.

Sarbanes-Oxley Act.

Why is it often easy for top level management to commit fraud? Subordinates feel intimidated and may not report it. Fewer internal controls may be in place at that level. They can override the internal control system. They know that the firm will not be audited.

Subordinates feel intimidated and may not report it. Fewer internal controls may be in place at that level. They can override the internal control system.

The ending balance in cash is reported in which financial statement(s)? The balance sheet only The balance sheet and income statement The statement of cash flows only The balance sheet and statement of cash flows

The balance sheet and statement of cash flows

Who is responsible for providing an opinion on management's assessment of internal control? The company's auditors The CEO and CFO Audit committee SEC staff auditor

The company's auditors

The components of internal control are required by the SEC. required by the American institute of Certified Public Accountants. based on the ethical tone set by management. required by state law.

based on the ethical tone set by management.

The two types of control procedures are preventive and ......... .

detective

When a person intentionally deceives another person or company for personal gain, this is referred to as

fraud

Separation of duties requires that two employees may not work on the same project if they are related. individuals who have physical responsibility for assets should not have access to accounting records. the board of directors may not influence the decisions of the top managers. an employee procedures manual must be developed to describe duties.

individuals who have physical responsibility for assets should not have access to accounting records.

A company's plans to safeguard company assets and enhance the reliability and accuracy of accounting information are referred to as general controls. internal controls. security controls. protective controls. corporate regulations.

internal control

The statement of cash flows is useful because it provides more accurate information than the balance sheet. it is more accurate in measuring net income for the period. it provides information on the company's ability to maintain long-term success. it is prepared on an accrual basis.

it provides information on the company's ability to maintain long-term success.

The sum of net cash flows from operating, investings, and financing activities reported in the statement of cash flows represents the: Multiple choice question. net increase or decrease in cash during the year cash balance at the end of the current year cash balance at the beginning of the current year

net increase or decrease in cash during the year

Controls designed to prevent errors or fraud from occurring are referred to as Blank______ controls. reactive preventive proactive detective

preventive

Margot, a prospective investor, wants to know how much cash Ziegler Inc. has on December 31. Margot can find the information in Ziegler's: (Select all that apply.) statement of stockholders' equity income statement statement of cash flows balance sheet

statement of cash flows balance sheet

Managers who are entrusted with taking care of the assets of the company are referred to as Blank______ of the company's assets.

stewards

The two most common sources of occupational fraud are:

financial statement manipulation misuse of company resources

The accounting term for a situation where two or more people act in coordination to circumvent internal controls is-----------

collusion

The Sarbanes-Oxley Act applies to . any company organized in the United States. companies that are required to file with the SEC. companies that operate internationally. companies that are formed as partnerships.

companies that are required to file with the SEC.

The amount of cash in the balance sheet reflects the Multiple choice question. cash inflows to the company from selling goods and services. amount of cash spent during the period. ending cash on the balance sheet date. cash expected to be used in the following year.

ending cash on the balance sheet date.

Internal control components are built on the foundation of the-------- tone established by top management in its control environment.

ethical

Internal control consists of plans to (Select all that apply.) safeguard company assets. provide accurate and reliable accounting information. report misuse of company assets to investors. report management errors to the police.

safeguard company assets. provide accurate and reliable accounting information