FAR — Financial Accounting & Reporting — Quiz 30

Questions in this quiz (10)

1. Which of the following best describes the role of internal control in financial reporting?

   • Internal controls replace accounting policies
   • Internal controls help ensure accurate financial reporting
   • Internal controls eliminate external audits
   • Internal controls prevent all fraud

2. Which internal control restricts access to financial records?

   • Segregation of duties
   • Access controls and passwords
   • Monitoring
   • Risk assessment

3. Which of the following indicates weak internal control?

   • Independent review of accounting records
   • Segregation of duties
   • One employee handles cash receipts and records transactions
   • Periodic bank reconciliations

4. What is the overall objective of internal control systems?

   • Guarantee profitability
   • Eliminate all business risks
   • Safeguard assets and ensure reliable reporting
   • Replace management oversight

5. Which of the following best defines cash?

   • Only physical currency
   • Funds readily available for use
   • Long-term investments
   • Inventory converted to cash

6. Which item is considered a cash equivalent?

   • Accounts receivable
   • Short-term Treasury bills
   • Inventory
   • Equipment

7. Which item is not classified as cash?

   • Currency
   • Coins
   • Postdated checks
   • Demand deposits

8. Which procedure helps ensure accurate cash balances?

   • Inventory count
   • Bank reconciliation
   • Expense recognition
   • Revenue matching

9. Which item is added to the bank balance during reconciliation?

   • Outstanding checks
   • Bank fees
   • Deposits in transit
   • NSF checks

10. Which item is deducted from the bank balance during reconciliation?

    • Deposits in transit
    • Outstanding checks
    • Bank collections
    • Interest earned