ACCT 2301 Chapter 7 – Flashcards
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Physical controls do not include
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independent bank reconciliations.
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A company writes a check to replenish a $100 petty cash fund when the fund contains receipts of $94 and $3 in cash. In recording the check, the company should
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debit Cash Over and Short for $3.
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All of the following would involve a debit memorandum except
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interest earned
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Which of the following statements correctly describes the reporting of cash?
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Cash is listed first in the current assets section.
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Which of the following statements is true under IFRS?
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All of these answer choices are correct.
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Which of the following control activities is relevant when a company uses a computerized (rather than manual) accounting system?
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All of these answer choices are correct
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The use of pre-numbered checks in disbursing cash is an application of the principle of
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documentation procedures
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The control features of a bank account do not include
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having bank auditors verify the correctness of the balance per books.
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Cash equivalents include each of the following except
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petty cash
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The Sarbanes Oxley Act (SOX) internal control standards apply only to companies listed on the U.S. exchanges.
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True
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Which of the following is not an element of the fraud triangle?
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segregation of duties
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The principles of internal control do not include
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management responsibility
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Cash is the asset most susceptible to fraudulent activities.
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true
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Counting of daily cash receipts by a supervisor is an application of which internal control principle?
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Independent internal verification
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An employee authorized to sign checks should not record
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cash disbursement transactions.
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Entries are made to the Petty Cash account when
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establishing the fund
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A bank may issue a credit memorandum for
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the collection of a note receivable by the bank for the depositor.
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On a bank reconciliation, deposits in transit are
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added to the bank balance.
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Which of the following items at November 30 is not cash or cash equivalent?
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treasury bond
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High-quality international accounting requires both high-quality accounting standards and high-quality controls standards.
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false
