Internal control is defined, in part, as a plan that safeguards
Select one:
a. all balance sheet accounts.
b. liabilities.
c. assets.
d. capital stock.
answer
c
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Internal controls are not designed to safeguard assets from
Select one:
a. natural disasters.
b. employee theft.
c. robbery.
d. unauthorized use.
answer
a
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Control over cash disbursements is generally more effective when
Select one:
a. all purchases are made on credit.
b. payments are made by check.
c. disbursements are made by the accounts payable subsidiary clerk.
d. all bills are paid in cash.
answer
b
question
A petty cash fund is generally established in order to
Select one:
a. pay relatively small expenditures.
b. pay employees' wages.
c. pay for all merchandise purchased on account.
d. make loans internally to employees.
answer
a
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A company stamps checks received in the mail with the words "For Deposit Only". This endorsement is called a(n)
Select one:
a. blank endorsement.
b. operational endorsement.
c. restrictive endorsement.
d. rubber stamp.
Previous page
answer
c
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Internal controls are concerned with
Select one:
a. the extent of government regulations.
b. safeguarding assets.
c. preparing income tax returns.
d. only manual systems of accounting.
answer
a-
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Which one of the following is not an objective of a system of internal controls?
Select one:
a. Overstate liabilities in order to be conservative
b. Reduce the risks of errors
c. Safeguard company assets
d. Enhance the accuracy and reliability of accounting records
answer
a
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Which one of the following items would not be considered cash?
Select one:
a. Postdated checks
b. Currency
c. Coins
d. Money orders
answer
a
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If employees are bonded
Select one:
a. it means that they are not allowed to handle cash.
b. they have been insured against misappropriation of assets.
c. it is impossible for them to steal from the company.
d. they have worked for the company for at least 10 years.
answer
b
question
Which of the following is not one of the main factors that contribute to fraudulent activity?
Select one:
a. Opportunity.
b. Incompatible duties.
c. Financial Pressure.
d. Rationalization.
answer
b
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