Question

Select the correct answer

Which of the following is a good system of internal control: A. Urges adherence to prescribed managerial policies B. Insures profitable operations C. Eliminates the need for an audit D. Requires the use of non-computerized systems E. Is not necessary if the company uses a computerized system When, two clerks share same cash register, which one of the internal control principle is 1. violated? A. Establish responsibilities B. Maintain adequate records C. Insure assets D. Bond key employees E. Apply technological controls At end of the day, the cash register's record shows $155, but the count of cash in the cash register is $150. The correct entry to record the cash sales for the day is: 2. A. Cash Sales 150 150 В. Cash 150 Cash over and short Sales 155 С. Cash 155 Sales 155 D. Cash Sales Cash over and short 155 150 3. A company receives a 10%, 60-day note for $2,400. The total interest due upon the maturity date is A. $37.50 B. $40.00 C. $60.00 D. $240 E. $87.50

Q1

At end of the day, the cash register's record shows $155, but the count of cash in the cash register is $150. The correct entry to record the cash sales for the day is:

Q2

A company receives a 10%, 60-day note for $2,400. The total interest due upon the maturity date is:

Q3

A machine that originally had an estimated useful life of 8 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining:

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first four questions should be answered. Kindly take note of it.

Part 1

Option A

Urges adherence to prescribed managerial policies.

To have proper implementation of internal control it is essential to stick to managerial policies. Good internal control system is well aligned with managerial policies.

Part 1

Option A

Establish responsibilities

In case of internal control separate responsibility of each individual is established.

Part 2

Option B

Cash	150
Cash over and short	5
Sales		155

The difference of $5 (155-150) is assigned to cash over and short

Part 3

Option B

Interest = 2400*10%*60/360 = $40

Part 4

Option A

States that an amount can be ignored if its effect on the financial statements is unimportant to users' business decisions

The materiality principle, also well known as materiality constraint, allows to ignore insignificant information.