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Chapter 4?Internal Control and Cash Choose the proper category of internal control activities that...




Question;Name:Chapter 4?Internal Control and CashChoose the proper category of internal control activities that best matches the following actions. Each actionshould be matched with a different numbered item within the internal controls list.a. One employee or department should verify the work of another.h. Specific approval is given by management for the performance of activities.c. Accounting and cash collections should be properly separated.d. Blank checks should be stored in a locked location.e. Initial entry into the accounting system should be from a consistent source with completeinformation.1. Clearly defined authority and responsibility2. Segregation of duties3. Adequate documents and records4. Safeguards over assets and records5. Checks on recorded amountsThe following set of items describes activities completed by a company in purchasing and paying formerchandise and in collecting cash for merchandise sales. For each activity, identify whether or not theactivity adheres to or violates sound internal control procedures.(Choices may be used more than once.)a. Adheres to sound internal controlsb. Violates sound internal controlsc. Neither strengthens nor violates internal control6. Although department supervisors can request a preferred supplier or vendor, the purchasing department has theresponsibility for making the final decisions on a vendor.7. The receiving department compares the quantity of merchandise received with the quantity ordered.8. Mathematical extensions and footings on purchase invoices are verified before the invoices are paid.9. Allsupporting documents attached to an invoice are canceled when the check is signed.10. The clerk in theaccounting department records both purchases and payments of invoices.11. Checks are signed by the clerk in the accounting department.12. Amailroom employee opens the mail, countsthe money received, and updates the accounting records for the amount received.13.An accounting department employee records cash receiptsfrom customers and prepares the bank deposit slips.14. Cash register tapes are recordeddaily by an employee from the accounting department.15.An employee from the accounting department compares the cash register tapes with the bank deposits.16. Monthly statements aremailed to customers to indicate the current balance due.MULTIPLE CHOICE17.Which of theassets listed below is considered the most liquid?a. Accounts receivableb. Cashc. Inventoryd. Prepaid insurance18. According to the Sarbanes-Oxley Act of 2002, who is primarily responsible for establishing and maintaining asystem of internal control over the company's financial reporting?a. Management of the companyb. The company's auditor'sc. The company'sinternal auditorsd.The auditcommittee ofthecompany's board of directorsFor complete question refer attachment


Paper#37794 | Written in 18-Jul-2015

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