Question

1) All of the following are purposes of internal control except to:
A) Promote operational inefficiency.
B) Safeguard assets.
C) Ensure accurate and reliable accounting records.
D) Prevent and detect error and fraud.

2) An effective accounting information system:
A) allows employees flexibility in setting the working hours.
B) guarantee a company will not go bankrupt.
C) includes control, compatibility, flexibility, and a favourable cost/benefit relationship.
D) promote operational efficiency.
E) will prevent fraud in all cases.

3) Paying top salaries to attract top-quality employees is a part of which characteristic of internal control?
A) Proper authorization
B) Competent, reliable, and ethical personnel
C) Separation of duties
D) Assignment of responsibilities

4) Keeping office supplies under lock and key is representative of:
A) safeguarding assets.
B) following company policies.
C) promoting operations efficiency.
D) ensuring accurate, reliable accounting records.

5) Two or more employees working together to defraud a company is referred to as:
A) Embezzlement.
B) Fraud.
C) Collusion.
D) Team work.

6) Outstanding cheques are cheques:
A) Not yet deducted on the books.
B) Not yet mailed by the payor.
C) Not yet paid by the bank.
D) That have been paid by the bank.

Answer 1

1) All of the following are purposes of internal control except to:
Answer : A) Promote operational inefficiency.

2) An effective accounting information system:
Answer :C) includes control, compatibility, flexibility, and a favourable cost/benefit relationship.

3) Paying top salaries to attract top-quality employees is a part of which characteristic of internal control?

Answer :B) Competent, reliable, and ethical personnel

4) Keeping office supplies under lock and key is representative of:
Answer :A) safeguarding assets.

5) Two or more employees working together to defraud a company is referred to as:

Answer : C) Collusion.

6) Outstanding cheques are cheques:

Answer : D) That have been paid by the bank.

Answer 2

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