Internal Controls in Accounting Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Outstanding credits are _____ to the bank statement balance.

Question 2 2. Which of the following terms best describes the equipment that is created by the use of scientific knowledge that aids in streamlining business operations?

Question 3 3. The first step in the audit process requires that an auditor look at the manner in which financial documents are transferred to the accounting department. Why is this necessary?

Question 4 4. Why is an audit report valuable?

Question 5 5. How would a company implement internal controls focused on employee efficiency?

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Question 6 6. A way to monitor a company's credit, collections, cash allocation and disbursement policies as well as its invoicing function is called which of the following?

Question 7 7. Which of the following is NOT a purpose of the Sarbanes-Oxley Act?

Question 8 8. _____ are rules and regulations that are put into place to guard the assets owned by a person or a company.

Question 9 9. Which principle states that the cost of implementing a certain internal control procedure must not outweigh the benefit that the company receives from that procedure?

Question 10 10. What procedures are put in place within an organization to ensure business is carried out in an orderly, effective, and accurate manner?

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Question 11 11. What are checks or withdrawals that are recorded in the cash account but have not yet been recorded in the bank account?

Question 12 12. _____ human error is the result of honest mistakes and are not planned actions.

Question 13 13. What are rules and regulations that are put into place to guard assets owned by a person or a company?

Question 14 14. Which of the following internal controls creates a check and balance system?

Question 15 15. What is the law that protects investors from fraudulent accounting activity?

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Question 16 16. _____ means to separate one big job into several small jobs, with a different individual performing each.

Question 17 17. Why is the most important thing an auditor can do is form an opinion?

Question 18 18.

A company has the following information:

$10,000 in the bank; $25,000 in 90 day CDs; $15,000 in 1 year bonds; $5,000 in money orders; $30,000 in real estate

How much cash and cash equivalents does the company have on-hand?

Question 19 19. The information found on the financial statements of a company that tells how good or bad a company is performing is called _____.

Question 20 20. A loss that occurs from honest mistakes being made by individuals is called a(n) _____ loss.

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Question 21 21. Which statement best describes earnings management?

Question 22 22. What year was the Sarbanes-Oxley Act enacted?

Question 23 23. The ability to process payroll in one hour instead of four hours is reflective of which of the following areas of internal control?

Question 24 24. What is the business asset most vulnerable to fraudulent activity?

Question 25 25. How did the stock market crash of 1929 affect the creation of the Security and Exchange Commission?

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Question 26 26. Ben, a company accountant, accidentally reported $5300 of earnings as $3500 on a company financial statement. Ben's mistake is an example of _____.

Question 27 27. Why is an auditor important in the world of accounting?

Question 28 28. The organization that oversees the audits of public companies is called the _____.

Question 29 29. In order to perform a bank reconciliation you will need the check register and which of the following?

Question 30 30. In her role as an accountant for ABC Manufacturing Janis has uncovered a pattern of errors made by one clerk in the parts department. How should Janis handle this situation?

Internal Controls in Accounting Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 101: Financial Accounting  /  Business Courses
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