FAR — Financial Accounting & Reporting — Quiz 22

Questions in this quiz (10)

1. Which internal control helps safeguard assets such as inventory and cash from unauthorized use?

   • Physical controls
   • Monitoring
   • Risk assessment
   • Authorization procedures

2. Which internal control component involves identifying and analyzing risks?

   • Control activities
   • Risk assessment
   • Monitoring
   • Information and communication

3. Which of the following represents monitoring internal controls?

   • Recording journal entries
   • Periodically reviewing internal control performance
   • Approving transactions
   • Recording revenue

4. Which internal control principle includes job rotation and mandatory vacations?

   • Segregation of duties
   • Human resource controls
   • Monitoring
   • Authorization procedures

5. Which internal control principle prevents one employee from controlling all aspects of a transaction?

   • Monitoring
   • Segregation of duties
   • Authorization
   • Independent verification

6. Which internal control component ensures financial information is communicated properly?

   • Control environment
   • Information and communication
   • Monitoring
   • Risk assessment

7. What is the purpose of internal audits?

   • Prepare tax returns
   • Evaluate internal controls
   • Record transactions
   • Prepare financial statements

8. Which internal control restricts access to assets and accounting records?

   • Authorization procedures
   • Physical controls
   • Monitoring
   • Segregation of duties

9. Which situation weakens internal control?

   • Separate authorization and recording duties
   • Independent review of records
   • One employee authorizes and records transactions
   • Periodic inventory counts

10. Which internal control verifies the accuracy of accounting records?

    • Monitoring
    • Independent checks
    • Risk assessment
    • Authorization