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An element of internal control is (Points : 2) risk assessment. journals. subsidiary ledgers. controlling accounts.

1. An element of internal control is (Points : 2)
risk assessment.
subsidiary ledgers.
controlling accounts.

2. A firm's internal control environment is influenced by (Points : 2)
Management's operating style.
organizational structure.
personnel policies.
all of these.

3. Requiring employees to take annual vacations is part of which element of internal control? (Points : 2)
The control environment
Risk assessment
Control procedures

4. A bank reconciliation should be prepared periodically because (Points : 2)
the depositor's records and the bank's records are in agreement.
the bank has not recorded all of its transactions.
any differences between the depositor's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected.
the bank must make sure that its records are correct.

5. The purpose of the Sarbanes-Oxley Act of 2002 is to (Points : 2)
restore public confidence and trust in the financial statements of publicly held companies.
require all companies to prepare financial statements.
protect companies from demands of investors, stockholders, and creditors.
do all of these.

6. The bank reconciliation (Points : 2)
should be prepared by an employee who records cash transactions.
is part of the internal control system.
is for information purposes only.
is sent to the bank for verification.

7. A minimum cash balance required by a bank is called (Points : 2)
cash in bank.
cash equivalent.
compensating balance.

8. Which of the following is NOT defined as cash? (Points : 2)
Money orders
Commercial paper

9. Which of the following reflects a weak internal control system? (Points : 2)
All employees are well supervised.
A single employee is responsible for comparing a receiving report to an invoice.
All employees must take their vacations.
A single employee is responsible for the collecting and recording of cash.

10. Which of the following would be added to the balance per books on a bank reconciliation? (Points : 2)
Service charges
Outstanding checks
Deposits in transit
Notes collected by the bank

This question was asked on Sep 08, 2011.

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