FINAL – BUS 214 CH.4 – Flashcards

Internal control cannot always safeguard against this problem

This is often mentioned as the cornerstone of a good system of internal control

Pay employees enough to require them to do a good job

This procedure limits access to sensitive data

This type of insurance policy covers losses due to employee theft.

Trusting your employee can lead you to overlook this procedure.

This is the most basic purpose of internal control

The bank statement shows interest earned $50

The bank statement showed that the bank had credited Trisha's account for a $500 deposit made by Tyson Company

A check for $753 written by Trisha during the current month was erroneously recorded as a $375 payment

The bank statement included a check from a customer that was marked NSF.

A $600 deposit made on the last day of the current month did not appear on this month's bank statement

Which of the following reconciling items does not require a journal entry? a) Bank service charge b) Bank collection of a note receivable c) Deposit in transit d) NSF check

A check was written for $462 to purchase supplies. The check was recorded in the journal as $426. The entry to correct this error would. a) increase Supplies $36 b) decrease Cash $36 c) decrease Supplies $36 d) both a and b

A cash budget helps control cash by a) developing a plan for increasing sales b) ensuring accurate cash records c) helping to determine whether additional cash is available for investments or new financing is needed. d) all of the above

All of the following are objectives of internal control except a) to safeguard assets b) to ensure accurate and reliable accounting records c) to maximize net income d) to comply with legal requirements

All of the following are internal control procedures except a) Sarbanes-Oxley reforms b) assignment of responsibilities c) internal and external audits d) adequate records

In a bank reconciliation, an outstanding check is a) deducted from the book balance b) deducted from the bank balance c) added to the bank balance d) added to the book balance

In a bank reconciliation, an EFT cash payment is a) added to the bank balance b) added to the book balance c) deducted from the book balance d) deducted from the bank balance

In a bank reconciliation, interest revenue earned on your bank balance is a) added to the bank balance b) added to the book balance c) deducted from the book balance d) deducted from the bank balance

Which of the following assets are not included in "cash equivalents" in a typical balance sheet? a) Certain very low-risk equity securities b) U.S government securities c) Time deposits d) Foreign government securities e) All of the above might be included in "cash equivalents"

If a bookkeeper mistakenly recorded a $92 deposit as $29, the error would be shown on the bank reconciliation as a a) $63 deduction from the book balance b) $63 addition to the book balance c) $29 addition to the book balance d) $29 deduction from the book balance