Ch. 8 accounting

which of the following are principles of internal control?

-Divide responsibility for related transactions -Perform regular and independent reviews -Maintain adequate records -Establish responsibilities

All of the following describe blockchain:

-blockchain is continuously and simultaneously updated and verified -blockchain makes it more difficult for the ledger to be modified without a detailed record of changes

Each of the following are types of technological impacts related to internal control:

-reduced processing errors -new evidence of processing -more extensive testing of records -separation of duties

summerize the document flow, or steps, in a voucher system by placing the following actions in their correct order of occurance.

1. a purchase requisition is filled out and placed in voucher. 2. A purchase order is completed and a copy is placed in voucher. 3. a receiving report is completed when the order arrives and placed in voucher. 4. The accounting department approves payment of the invoice and approval is placed in voucher. 5. The cashier issues a check for the amount of the invoice

the following annual account balances are taken from ABC Co at year end.

ABC Co is shortening the amount of time that money is tied up in reciecables, ABC Co took approximately 32 days to collect cash from its credit customers in the current year, ABC Co has shortened the amount of time it takes to collect receivables from customers

determine which of the statements below accurately describe services provided by a bank.

Each bank deposit is supported by a deposit ticket, a bank account is a record set up by a bank for a customer, to withdraw money from an account, the depositor can use a check

identify which of the items below are goals of good cash management.

Keep a minimum level of cash necessary to operate. Plan cash receipts to meet cash payments when due.

select the items below that would cause the bank statement balance to differ from the depositors book balance

NSF check, Deposit in transit, interest paid by bank

a good internal control to protect cash is to make cash payments using

checks

Define what liquidity means by completing the following sentence. Liquidity refers to a company's ability to pay for its ______ liabilities.

current

Auditors focus kore on testing the ____ of a company's blockchain processes and technology than on verifying the _____ of its output.

effectiveness/accuracy

identify the basic internal control guidelines which should be in place to protect a business's cash by selecting the correct answers below.

handling cash is separate from recordkeeping of cash. cash payments are made by check. cash receipts are promptly deposited in a bank.

which of the answers below CORRECTLY describe the cash over and short account?

it is an income statement account, a debit balance reflects an expense, it records the effects of cash overages and cash shortages.

review the following statements ans select the ones which ACCURATELY describe a petty cash fund.

it is established to pay for small payments like low-cost supplies and shipping fees, etc., it is an asset reported on the balance sheet

identify the statement below that describes what the Days' sales uncollected ratio assesses

it measures how quickly a company can convert its accounts receivables into cash

which of the statements below describe the goals and principles of cash management?

keep a minimum level of cash necessary to operate, Money should be spent only when it is available, plan cash receipts to meet cash payments when due, encourage quick collection of receivables

whixh statement below explains why liquid assets are needed in a business?

liquid assets must be available to pay current liabilities

Identify the principles of internal control by selecting the correct answers below.

maintain adequate records, apply technological controls, establish responsibilities, separate record keeping from custody of assets, perform regular and independent reviews, insure assets

which of the following are CORRECT regarding why management uses internal controls?

protect assets, promote efficient operations, ensure reliable accounting, uphold company policies

The triple threat of fraud involves:

rationalization, pressure, opportunity

Describe what a petty cash fund is by completing the following sentence. A petty cash fund is used for ____ payments

small

which of the following statements below explains how technology has impacted internal control systems?

technology has reduced the number of processing errors, technologically advanced systems can record who made entries, the date and time of the entry and the source. Technology has encouraged the growth of e-commerce, which means that there is a higher risk of credit card number theft.

a cash register tape reflected total sales equating $100, but the cash in the cash register drawer equaled $105. Review the statements below and determine which is CORRECT regarding this discrepancy.

the extra $5 collected will be treated as a miscellaneous revenue, the sales account will be credited $100, the cash account will be debited $105. The cash over and short account will be credited $5

determine which of the statements below is correct regarding information reflected on a monthly bank statement.

the information on the bank statement reflects the bank's records of the depositors account.

determine the statements that are true regarding why a bank reconciliation is used

timing differences between the bank statement and the depositors records are reflected in the bank reconciliation, the bank reconciliation is useful in providing the accuracy of the cash account in the general ledger, we must reconcile the balance of the banks records and the cash account in the general ledger and explain or account for any differences in the two.

what is the purpose of internal controls?

to protect assets and ensure reliable accounting