Chapter 7 - Banking and Payroll

A type of internal control that seeks to find losses that have taken place is a

• preventive internal control

• detective internal control

• corrective internal control

• both A and C

Which type of check endorsement provides little protection because anyone who has the check can easily transfer it to another person or cash the check?

• blank endoresement

• restrictive endorsement

• special endorsement

• none of these

Salary or wages earned before deductions are made is called

• net pay

• gross pay

• overtime pay

• disability pay

Retirement accounts that are fully paid for by the employer are called

• defined benefit pension plans

• 401(k) retirement accounts

• 403(b) retirement accounts

• individual retirement arrangements

The type of internal control to reduce loss of cash due to employee error or theft is a

• ​preventative control

• detective control

• corrective control

• deductive control

A bank reconciliation is used to

• ​Determine that all deposits made have been recorded by the bank

• Verify that all checks were written by authorized persons in the company

• Determine the cash balance at the date of the bank statement

• All of these

Social Security benefits are paid

• when a person retires

• if a person becomes disabled

• to a surviving spouse in the vent of that person’s death

• all of these

A bank reconciliation is a type of

• preventative internal control

• detective internal control

• corrective internal control

• deductive internal control

Electronic funds transfer

• can be used for a one-time payment but not for regular monthly payments

• is the use of a computer network to transfer funds from one party to another

• is used for transactions between companies only

• all the above

A salesperson is paid $500 per week plus 5 percent commission on sales. The sales for the week were $2,500. What is this person’s gross pay for the week?

• $3,000

• $625

• $750

• $650