accounting 200- chapter 7 multiple choice

Which one of the following would not cause a bank to debit a depositor's account?

Collection of a note receivable.

An NSF check should appear in which section of the bank reconciliation?

Deduction from the balance per books.

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

Only one individual.

Which of the following would not be subtracted from the balance per books on a bank reconciliation?

Outstanding checks.

Which one of the following is not an objective of a system of internal controls?

Overstate liabilities in order to be conservative.

Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company's checkbook for subsequent misappropriation of funds?

The use of prenumbered checks.

Electronic funds transfer (EFT) is a disbursement system that transfers cash from one location to another using

a telephone, telegraph, or computer.

All of the following are items that would most likely be paid from a petty cash fund except

administrative wages. (freight-out, taxi fares, postage due)

From an internal control standpoint, the asset most susceptible to improper diversion and use is

cash

All of the following are examples of internal control procedures except

customer satisfaction surveys.

On a bank statement, paid checks are shown as

debits.

Deposits in transit

have been recorded on the company's books but not yet by the bank.

Sara Smith has worked for Bosco Inc. for 20 years without taking a vacation. An internal control feature that would address this situation would be

human resource controls.

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

increases the potential for errors and fraud.

Which one of the following items would not be considered cash?

postdated checks

Internal controls are concerned with

safeguarding assets.

A very small company would have the most difficulty in implementing which of the following internal control activities?

separation of duties

The control principle related to not having the same person authorize and pay for goods is known as

separation of duties.

A bank statement

shows the activities that increased or decreased the depositor's account balance.

A bank reconciliation should be prepared

to explain any difference between the depositor's balance per books with the balance per bank.