Response to the following multiple choice questions:
1. Sarbanes-Oxley:
applies to all businesses.
has a purpose of insuring all companies report only accurate financial statements.
was enacted in 2000.
only applies to businesses whose stock is traded on public exchanges
2. The objectives of internal control include all of the following EXCEPT:
to give accountants more "busy-work".
to provide reasonable assurance that business information is accurate
to provide reasonable assurance that assets are safeguarded.
to provide reasonable assurance that employees comply with laws.
3. Which of the following is NOT one of the five elements of internal control?
Physical safeguarding
The control environment
Control procedures
Risk assessment
4. Which of the following would NOT be considered a risk factor related to employee fraud?
Lack of bi-monthly paychecks.
Lack of proper management oversight
Lack of proper documentation for transactions
Lack of proper segregation of duties
5. Which of the following are controls over cash receipts and/or payments for Remtttance Advices and Voucher Systems?
Yes, Yes
Yes, No
No, Yes
No, No
6. The depositor's checking account balance in the bank's records is a(n) ________.
Liability
Asset
Revenue
Expense
7. In preparing a bank reconciliation, a service charge would be:
added to the cash balance according to the bank statement
deducted from the cash balance according to the bank statement
added to the cash balance according to the depositor's records
deducted from the cash balance according to the depositor's records
8. The bank statement reports an ending balance of $5,650 after deducting $120 in service charges and an addition of $2,400 for a note collected by the bank on the company's behalf. The depositor reports an ending balance of $720 and determines that deposits in transit equal $2,100 and outstanding checks equal $4,750. What is the adjusted balance for the bank?
$900
$3,000
$8,300
None of the above
9. Replenishing the petty cash fund will include an adjustment to __________.
Expense accounts
Petty cash
Capital stock
Accounts payable
10. If a company is required to maintain a minimum cash balance in their account, this balance is called a:
Minimum balance
Required balance
Compensating balance
True balance