Survey Accounting 3rd Ed Chap 2 Test Essay

19845 WordsJan 21, 201380 Pages
Page 1 of 47 4 Student: _______________________________________________________________________________________ 1. To have a strong internal control system, a business must have good administrative controls. Administrative controls include: A. B. C. D. the reconciliation of the bank statement. the accuracy of the recording procedures. assessing compliance with company policies. maintenance of accurate inventory records. 2. Which of the following statements concerning internal controls is true? A. Internal administrative controls are designed to limit the amount of funds spent on investments. B. The control procedure, separation of duties, prohibits the employment of a husband and wife or other closely related parties within the…show more content…
Unused checks should be locked up. The person approving the payment should also sign the check. The payment must be recorded on the books by someone other than the check signer. 13. The following are features of an internal control system except for: A. B. C. D. Bonding employees to recover losses through insurance Establishing proper procedures for processing transactions Mandatory retirement at the age of 65 Hiring and training competent employees 14. Which of the following is not a reason why a business needs strong internal controls over cash? A. B. C. D. A small volume of high-denomination currency represents a significant amount of value. Ownership of cash is difficult to prove. Cash has universal appeal. Money is the common unit of measurement in business. 15. Effective internal controls for cash include: A. B. C. D. making cash payments by prenumbered check. depositing cash in the bank on a timely basis. giving written cash receipts to customers as evidence of payment. all of these. 16. Which of the following is not a procedure for the control of cash receipts? A. B. C. D. Immediate preparation of records of all cash receipts. Giving customers written receipts for all monies paid. Using prenumbered checks. Depositing cash in the bank frequently. 17. Which of the following is not a procedure for control of cash payments? A. B. C. D. Checks should be properly authorized with approval signatures. The business should provide written

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