ACG Chapter 7 Quiz

A check correctly written by Speedy Delivery Company for $1,340 was incorrectly recorded on its books as $1,430. As a result, the company's next monthly bank reconciliation should include

$90 added to the cash balance per books.

A check correctly written by Speedy Delivery Company for $1,304 was incorrectly recorded on its books as $1,403. As a result, the company's next monthly bank reconciliation should include

$99 added to the cash balance per books.

Which of the following is an element of the fraud triangle?

Financial pressure

An office supply store has a cashier who is also the accounts receivable clerk for the company. Which internal control principle is violated?

Segregation of duties

Which of the following statements is correct regarding internal controls?

The person who has custody of assets should not perform the record keeping for the assets.

For which of the following errors should the appropriate amount be added to the cash balance per bank statement on a company's bank reconciliation?

A deposit of $10,000 was incorrectly recorded by bank as a deposit of $1,000.

When preparing a bank reconciliation, how are deposits in transit handled?

Added to the bank balance

Obtaining insurance protection against dishonest employees an example of

Bonding

Which of the following will not require an adjusting entry as a result of a bank reconciliation?

Deposits in transit

Which of the following statements is false with regards to record-keeping for bank reconciliations?

Deposits in transit do require a journal-entry once the bank reconciliation is completed.

For which of the following might a bank issue a debit memorandum to a depositor's account?

NSF check Monthly service charges

Which of the following requires an adjusting entry as the result of a bank reconciliation?

NSF checks

Under which of the following do computer programs that limit unauthorized access to certain files fall?

Physical controls

Which of the following is not an effective internal control over cash disbursements?

Requiring personnel who authorize cash disbursements to work continuously without vacations

Which one of the following is a physical control?

Safes and vaults to store cash

Which of the following is not a reason why an organization establishes a system for internal control?

To eliminate the need for an independent audit To be able to use the cash basis of accounting

Why should a bank reconciliation be prepared?

To explain any difference between the depositor's balance per books and the balance per bank

Internal auditors

evaluate the system of internal controls for the companies that employ them.

Reasonable assurance rests on the premise that

the costs of establishing controls should not exceed their expected benefit.