FAR — Financial Accounting & Reporting — Quiz 21

Questions in this quiz (10)

1. Which account classification applies to accumulated amortization?

   • Asset
   • Liability
   • Contra asset
   • Expense

2. Which of the following best describes the purpose of the accounting cycle?

   • To reduce operational costs
   • To ensure accurate recording and reporting of transactions
   • To eliminate financial statements
   • To avoid adjusting entries

3. Which statement about temporary accounts is correct?

   • They appear on the balance sheet
   • They carry balances forward
   • They are closed at the end of each period
   • They represent liabilities

4. Which of the following best describes the purpose of financial statements?

   • To record transactions
   • To summarize financial information for decision-making
   • To prepare journal entries
   • To detect fraud

5. Which of the following best defines internal control?

   • A process to eliminate all risks
   • A system ensuring reliable reporting, efficient operations, and compliance
   • A process used only for audits
   • A system used only for tax reporting

6. Which of the following is a primary objective of internal control?

   • Eliminating all business risks
   • Ensuring reliable financial reporting
   • Guaranteeing profits
   • Preventing all fraud

7. Which component of internal control influences organizational culture?

   • Control environment
   • Monitoring
   • Risk assessment
   • Control activities

8. Which of the following illustrates segregation of duties?

   • One employee records and approves transactions
   • Separate employees authorize, record, and maintain custody
   • Management approves all entries
   • One employee performs all accounting functions

9. Which internal control activity ensures transactions are properly approved?

   • Monitoring
   • Authorization procedures
   • Segregation of duties
   • Independent verification

10. Which internal control procedure compares records with actual assets?

    • Authorization
    • Independent verification
    • Segregation of duties
    • Monitoring