Cash and Internal Cash Control

Multiple Choice

Two employees used a business’s computerized accounting system to change some records. They were able to steal $50,000 from the business because the accounting system lacked which of the following:

• Protection from theft and fraud

• An affordable price

• A manual system as backup

• Printed financial statements

Open Ended

What are the definitions of fraud and internal control?

Multiple Choice

Misappropriation of assets can include:

• Overstating expenses in financial reports

• Underreporting income on tax returns

• Stealing company inventory

• Falsifying loan applications

Multiple Choice

Misappropriation of assets could include all of the following EXCEPT:

• Stealing office supplies

• Falsifying time reports

• Overstating sales in financial statements

• Using company vehicles for personal errands

Multiple Choice

Which of the following is NOT an example of fraud as mentioned in the text?

• A bookkeeper diverting funds from bill payments to a personal account

• A shipping clerk shipping merchandise to himself

• A CEO investing company funds into new technology

• A computer operator embezzling money from a bank

Multiple Choice

What are the three main components of the Sarbanes-Oxley Act (SOX) as illustrated in the image?

• Encourage Honesty, Reduce Opportunities, Counteract Incentives

• Encourage Honesty, Increase Opportunities, Counteract Incentives

• Encourage Dishonesty, Reduce Opportunities, Counteract Incentives

• Encourage Honesty, Reduce Opportunities, Increase Incentives

Multiple Select

What are the five components of internal control systems mentioned in the image?

• Control Environment

• Risk Assessment

• Control Activities

• Information and Communication

• Monitoring Activities

Multiple Choice

Which of the following are limitations of internal controls?

• Errors

• All of the available choices

• Intentional misuse

• Omissions

Multiple Choice

​The idea that a person who has custody of money or products should never be the person keeping records accounting for them is called _____.

• ​risk assessment

• ​assignment of responsibilities

• ​dual control

• ​separation of duties and approvals

Multiple Choice

What are the five common principles of internal control as shown in Exhibit 5.3?

• Document procedures

• Independently verify

• Segregation of duties

• Safeguard assets

Multiple Choice

What are the two reasons internal controls can never completely prevent and detect errors and fraud?

• Benefits must exceed the costs

• Human error or fraud

• Cost of implementation is too high

• Lack of employee training

Multiple Choice

What are two key controls in e-commerce to protect customers?

• Safeguard personal information

• Increase product prices

• Limit website access

• Enhance customer service

Multiple Choice

Why is internal control for cash important?

• To reduce cash-handling errors

• To increase cash transactions

• To eliminate cash theft

• To simplify cash management

Multiple Choice

What is the primary purpose of implementing internal controls for cash within an organization?

• To increase the amount of cash on hand

• To ensure compliance with tax regulations

• To safeguard assets and ensure the accuracy of financial records

• To reduce the need for financial audits

Multiple Choice

What are the internal controls for processing cash received in person?

• Segregate duties

• Assign responsibilities

• Document procedures

• Restrict access

Multiple Choice

What is the total amount of cash that cashiers had to deposit?

• $6,100

• $6,097

• $3

• $6,103

Multiple Choice

What is the invoice amount mentioned in the remittance advice?

• $75.10

• $200.00

• $100.50

• $50.00

Multiple Choice

What is the primary goal of internal controls for cash payments?

• To ensure proper authorization of transactions

• To minimize cash payments

• To increase cash flow

• To reduce transaction costs

Multiple Choice

What are the steps involved in the voucher system for cash paid by check for purchases on account?

• Request goods or services

• Order goods or services

• Receive goods or services

• Obtain bill for goods or services

Multiple Choice

_________ Records and manages all accounting related data associated with a company's vendors.

• General Ledger Accounting

• Accounts Receivable Accounting

• Asset Accounting

• Accounts Payable Accounting

Multiple Choice

A type of request for payment needs the following as attachments:

- Purchase Order

- Purchase Request

- Sales Invoice / Billing Statement

• Consultants

• Vendor

• Cash Advance

Multiple Choice

What are the steps involved in the cash payment process for purchases on account?

• Request goods or services

• Make payment

• Receive goods

• Document transaction

Multiple Choice

What is the total cost of the items listed in the purchase order?

• $23.30

• $34.50

• $11.20

• $5.60

Multiple Choice

What are the steps involved in the cash paid by check for purchases on account process?

• Receive goods or services

• Prepare a receiving report

• Notify the accounting department

• Document procedures

Multiple Choice

What is the purpose of obtaining a bill for goods or services in the voucher system?

• To verify the quantity received

• To ensure payment is made

• To document the transaction

• To approve the purchase

Multiple Choice

What is the fifth step in the process of cash paid by check for purchases on account?

• Write check or initiate an EFT

• Notify the accounting department

• Use prenumbered checks

• Mark the voucher 'paid'