FAR — Financial Accounting & Reporting — Quiz 32

Questions in this quiz (10)

1. Which internal control activity protects cash through restricted access or secure storage?

   • Monitoring
   • Physical safeguards
   • Authorization procedures
   • Risk assessment

2. Which financial statement reports the ending cash balance?

   • Income statement
   • Balance sheet
   • Statement of retained earnings
   • Statement of stockholders' equity

3. Which financial statement shows cash inflows and outflows during a period?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of retained earnings

4. Which internal control reduces the risk of employee theft of cash?

   • Removing documentation
   • Segregation of duties
   • Allowing unrestricted access
   • Eliminating bank reconciliations

5. What is the purpose of a bank reconciliation?

   • Prepare financial statements
   • Ensure company and bank balances agree
   • Calculate net income
   • Record transactions

6. Which item increases the company's book balance during reconciliation?

   • Bank service charges
   • NSF checks
   • Interest earned by bank
   • Outstanding checks

7. Which item represents checks issued but not yet cleared by the bank?

   • Deposits in transit
   • Outstanding checks
   • Bank service charges
   • NSF checks

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

   • Bank service charges
   • Deposits in transit
   • NSF checks
   • Outstanding checks

9. Which account is debited when interest revenue is earned?

   • Cash
   • Interest revenue
   • Bank expense
   • Accounts receivable

10. Which procedure helps detect differences between company and bank records?

    • Segregation of duties
    • Authorization procedures
    • Bank reconciliation
    • Physical safeguards