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| 1.
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The procedures for protecting cash from fraud and theft are a basic part of internal control procedures. |
| | A) | True |
| | B) | False |
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| 2.
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With the increasing use of computers for processing accounting information, internal control may depend more on reviews of the design and operations of the computerized accounting system and less on the reviews of documents left behind by the system. |
| | A) | True |
| | B) | False |
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| 3.
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For good cash control, the custody of cash should be included with the record keeping of cash. |
| | A) | True |
| | B) | False |
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| 4.
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The business form used by the purchasing department authorizing a vendor to ship merchandise or supplies is called a purchase requisition. |
| | A) | True |
| | B) | False |
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| 5.
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An analysis prepared to explain the difference between the balance of the chequing account of the depositor and the balance as shown by the bank statement is called a bank reconciliation. |
| | A) | True |
| | B) | False |
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| 6.
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The purchaser of goods or services may be known as a vendee. |
| | A) | True |
| | B) | False |
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| 7.
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The reimbursement of a petty cash fund will require a debit to the Petty Cash account for the amount of the replenishment. |
| | A) | True |
| | B) | False |
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| 8.
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When a bank reduces the depositor's chequing account for service charges or other items, the bank debits the depositor's account and sends the depositor a debit memorandum. |
| | A) | True |
| | B) | False |
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| 9.
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It is not possible for the bank statement to show a larger ending cash balance than the ending cash balance shown on the balance sheet. |
| | A) | True |
| | B) | False |
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| 10.
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During the reconciliation analysis, if it is determined that the depositor's bank has made an error in recording a deposit, then the depositor should record a correcting entry for the amount of the error. |
| | A) | True |
| | B) | False |
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| 11.
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The Cash Over and Short account should be closed to the Capital account during the closing process. |
| | A) | True |
| | B) | False |
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| 12.
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Cash is considered to be a liquid asset. |
| | A) | True |
| | B) | False |
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| 13.
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On the bank statement the bank has recorded a deposit of $1,112 in error as $1,121. After the bank is notified and the error is verified, a journal entry will be required on the books of the depositor. |
| | A) | True |
| | B) | False |
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| 14.
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In preparing the bank reconciliation, it is discovered that a cheque for the $87.00 telephone bill was written correctly for that amount but recorded in error in the journal at $78.00. This error will require a journal entry to correct the balance of the Cash account. |
| | A) | True |
| | B) | False |
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| 15.
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Technology and internal control has reduced processing errors and provided much more extensive testing of the records. |
| | A) | True |
| | B) | False |
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| 16.
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Separation of duties is really not a critical item of control procedures. |
| | A) | True |
| | B) | False |
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| 17.
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One of the key limitations of internal control is the cost of the control weighed against the benefit of incurring the cost of the control. |
| | A) | True |
| | B) | False |
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| 18.
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The cash in the register totals $405 after deducting the beginning change fund. The master tape in the register reports sales for the day at $404. The register has a $1 cash shortage. |
| | A) | True |
| | B) | False |
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| 19.
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Cash Over and Short can be either a miscellaneous revenue account or a miscellaneous expense account. |
| | A) | True |
| | B) | False |
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| 20.
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In a voucher control system a purchase requisition is prepared before a purchase order is completed. |
| | A) | True |
| | B) | False |
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| 21.
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Verification that all goods ordered and listed on the purchase invoice have arrived is completed on the invoice approval form. |
| | A) | True |
| | B) | False |
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| 22.
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Quick assets are those current assets that are most liquid, including cash, short-term investments, receivables, prepayments and inventory. |
| | A) | True |
| | B) | False |
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| 23.
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To bond an employee is to purchase an insurance policy against losses from theft by that employee. It is part of the internal control procedures. |
| | A) | True |
| | B) | False |
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| 24.
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The record-keepers have the knowledge of the accounting records of the assets. It is convenient for them to have the responsibility for the custody of the assets. The integrity of assets and records is easy to maintain. |
| | A) | True |
| | B) | False |
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| 25.
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Deposits in transit should be recorded and adjusted in the book record for the bank reconciliation. |
| | A) | True |
| | B) | False |
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