Question

1. Each of the following represents an internal control procedure except​ for:
A.clear lines of authority and communication.
B.compliance monitoring.
C.separation of duties.
D.limited access to both assets and records
2. As part of a strong internal control​ system, which of the following accounting duties need to be separated from cash​ handling?
A.Record keeping
B.Filing
C.Transaction approval
D.Both A and C need to be separated from cash handling.
3. Which of the following is NOT a way to safeguard​ controls?
A.keeping accurate financial records
B.mandatory vacations
C.rotating employees into different job position
D.purchasing a fidelity bond
4. Payment by check is an important internal control​ because:
A. the check provides a record of the payment.
B. the check must be signed by an authorized official who should study the evidence supporting the payment.
C. all checks must be approved by the​ bank's internal audit department before they are paid.
D. A and B
5. Lori's Company has the following​ items: cash in a checking​ account, $ 8,000​; cash in a savings​ account, $ 6,000​; highminusgrade government securities due in one month​ (purchased last​ month), $ 3,536​; accounts​ receivable, $3,000. How much should appear as Cash and Cash Equivalents on the balance​ sheet?
A.$20,536
B. $17,536
C. $ 21,236
D. $6,000
7. Leno Company sells goods to the Fallon Company for $ 10,000. It offers credit terms of 4​/10, ​n/30. If Fallon Company pays the invoice within the discount​ period, Leno Company will record a debit to Cash in the amount​ of:
A.$10,400.
B.$10,000.
C. $400.
D.$ 9,600.
8. Before the year-end ​adjustment, the credit balance in Allowance for Uncollectible Accounts was $ 1,000. Under the agingminusofminusreceivables ​method, the UncollectibleminusAccount Expense at year-end ​is:
A.$10,780.
B.$9,780.
C.$1,300.
D.$11,780.
9. Using the percentageminusofminussales ​method, the estimated total uncollectible accounts are $6,922. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $ 3,135. The Accounts Receivable balance is $ 44,820. The amount of the adjusting entry for UncollectibleminusAccounts Expense​ is:
A.$6,922.
B.$3,787.
C.$10,057.
D.$3,135.
10. The following item appeared on a balance​ sheet:
       Accounts​ Receivable, less allowance of $ 86,196 ......$ 1,436,600
The gross balance in Accounts Receivable before the allowance was deducted​ was:
A.$1,522,796.
B.$1,436,600.
C.$1,350,404.
D. none of the above

Answer 1

1, Answer is B Compliance Monitoring

It is because all others are part of internal control policies whereas Compliance Monitoring forms a different activity for the organisation.

2. Answer is D. Both A and C

It is because the cashier shall neither be the record keeper nor the transaction approver. He shall only be assigned the duty of cash acceptance and payment.

3. Answer is D. Purchasing a fidelity bond.

All others form part of activities which strengthen internal control whereas purchasing a fidelity bond would be a finance or treasury activity,

4. Answer is D. Both A and B.

It is self explanatory.