FIN 534 Quiz 9;Question 1;The Sarbanes-Oxley Act requires that all U.S. corporations under the juris-diction of the Securities and Exchange Commission;maintain an adequate system of internal control.;must file reports with the National Commission on Fraudulent Financial Reporting.;have at least one foreign subsidiary.;maintain accounting records of foreign branches and subsidiaries in the local foreign currency.;Question 2;The control principle related to not having the same person authorize and pay for goods is known as;segregation of duties.;establishment of responsibility.;independent internal verification.;rotation of duties.;Question 3;Maximum benefit from independent internal verification is obtained when;it is done by the employee possessing custody of the asset.;discrepancies are reported to management.;it is done at the time of the audit.;it is made on a pre-announced basis.;Question 4;Allowing only designated personnel to handle cash receipts is an example of;documentation procedures.;independent internal verification.;establishment of responsibility.;segregation of duties.;Question 5;Storing cash in a company safe is an application of which internal control principle?;Segregation of duties;Documentation procedures;Physical controls;Establishment of responsibility;Question 6;Reconciling the bank statement monthly is an example of;independent internal verification.;documentation procedures.;establishment of responsibility.;segregation of duties.;Question 7;A voucher system is a series of prescribed control procedures;to check the credit worthiness of customers.;which eliminates the need for a sales journal.;designed to assure that disbursements by check are proper.;specifically designed for small firms who may not have checking accounts.;Question 8;The size of the petty cash fund is dependent on;the size of the regular cash account.;the wishes of the custodian of the fund.;anticipated disbursements for the year.;anticipated disbursements for a three- to four-week period.;Question 9;A $100 petty cash fund has cash of $18 and receipts of $86. The journal entry to replenish the account would include a;credit to Petty Cash for $86.;credit to Cash for $86.;debit to Cash for $86.;credit to Cash Over and Short for $4.;Question 10;A check returned by the bank marked "NSF" means;no signature found.;not sufficient funds.;no service fee.;not satisfactorily filled-out.;Question 11;A bank reconciliation should be prepared;by the person who is authorized to sign checks.;when an employee is suspected of fraud.;to explain any difference between the depositor's balance per books and the balance per bank.;whenever the bank refuses to lend the company money.;Question 12;Deposits in transit;have been recorded on the company's books but not yet by the bank.;have not been recorded by the bank or the company.;are checks from customers which have not yet been received by the company.;have been recorded by the bank but not yet by the company.;Question 13;When making a payment from the petty cash fund for postage stamps, the following journal entry is made.;a. Office Supplies XXXX;Petty Cash XXXX;b. Postage Expense XXXX;Petty Cash XXXX;c. Miscellaneous Expense XXXX;Petty Cash XXXX;d. No entry is made.;d.;c.;a.;b.;Question 14;A bank may issue a credit memorandum for;the collection of a note receivable for the depositor by the bank.;a bank service charge.;an NSF (not sufficient funds) check from a customer.;the cost of printing checks.;Question 15;Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of;1 month or less when purchased.;1 year or less when purchased.;6 months or less when purchased.;3 months or less when purchased.
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