Test3Spring2004 - TEST III Spring 2004 NAME _ Section _...

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TEST III Spring 2004 NAME _______________________ Section ______________________ TIME 8:00 or 9:00 or 11:00 (please circle time) MULTIPLE CHOICE (2 POINTS EACH) : 1. _______________ 2. _______________ 3. _______________ 4. _______________ 5. _______________ 6. _______________ 7. _______________ 8. _______________ 9. _______________ 10. _______________ 11. _______________ 12. _______________ 13. _______________ 14. _______________ 15. _______________ 16. _______________ 17. _______________ 18. _______________ 19. _______________ 20. _______________ Multiple Choice 40 Problem I 15 Problem II 25 Problem III 20 ____ 1 0 0
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Multiple Choice – There is only ONE best answer (2 points each) 1. Which of the following combination of turnover ratios indicates a company which has the shortest operating cycle A. Coastal Beverage/ inventory turnover 15, receivable turnover 20. B. Harley Davidson/ inventory turnover 12, receivable turnover 8 C. Miller Brewing/ inventory turnover 8, receivable turnover 24 D. Cannot be determined with the information provided 2. Which of the following is not a limitation of internal control? A. Cost of establishing control procedures should not exceed their benefit B. The human element C. Collusion D. The size of the company 3. Internal auditors A. are hired by CPA firms to audit business firms. B. are employees of the IRS who evaluate the internal controls of companies filing tax returns. C. evaluate the system of internal controls for the companies that employ them. D. cannot evaluate the system of internal controls of the company that employs them because they are not independent. 4. From an internal control standpoint, the asset most susceptible to improper diversion and use is A. prepaid insurance. B. cash. C. buildings. D. land. 5. A consequence of separation of duties is that A. theft by employees becomes impossible. B. operations become extremely inefficient because of constant training of employees. C. more employees will need to be bonded. D. theft is possible only when several employees are involved. 6. Two individuals at a retail store work the same cash register. You evaluate this situation as A. a violation of establishment of responsibility. B. a violation of separation of duties. C. supporting the establishment of responsibility. D. supporting internal independent verification. 7. The reconciliation of the cash register tape with the cash in the register is an example of A. other controls. B. independent internal verification. C.
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This note was uploaded on 10/26/2010 for the course ACC 201 taught by Professor Fresh during the Spring '10 term at Delaware County CC.

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Test3Spring2004 - TEST III Spring 2004 NAME _ Section _...

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