Fraud, Internal Control, and Cash

According to the fraud triangle discussed in the textbook, what are the three main factors that contribute to fraudulent activity?

Which principle of internal control is most directly associated with assigning responsibility to specific employees so that only one person is responsible for a given task?

The Sarbanes-Oxley Act (SOX) was passed by Congress in response to numerous corporate scandals. What is a key requirement of SOX for all publicly traded U.S. corporations?

Which of the following is NOT one of the six principles of control activities discussed in the chapter?

The use of prenumbered checks and invoices is an application of which principle of internal control?

At the end of the day, the cash register tape for a retail store indicated sales of $6,956.20, but the amount of cash in the drawer was only $6,946.10. What is the correct journal entry to record this transaction?

What is the primary purpose of a voucher system?

Laird Company establishes a $100 petty cash fund on March 1. On March 15, the fund contains $13 cash and petty cash receipts for postage $44, freight-out $38, and miscellaneous expenses $5. What is the journal entry to replenish the fund?

Which of the following is NOT a primary component of an internal control system?

An NSF check from a customer should be treated as which of the following in a bank reconciliation?

Deposits recorded by the company but not yet by the bank are called:

Which of the following reconciling items on a bank reconciliation requires an adjusting journal entry on the company's books?

Which of the following includes only items that would be classified as cash equivalents?

A company has a cash balance per its books of $11,709.45. Its bank statement shows a balance of $15,907.45. The reconciliation includes $2,201.40 in deposits in transit, $5,904.00 in outstanding checks, a $1,035.00 unrecorded EFT collection, and a $30 bank service charge. What is the adjusted cash balance?

Why might a company that has a large volume of cash transactions still have numerous errors?

A check that is not paid by a bank because of insufficient funds in a customer's bank account is called a(n):

Which of the following is an example of poor internal control regarding cash disbursements?

If a company's petty cash fund is established at $100 and it is replenished when it contains $12 cash and receipts for $88, but the custodian requests a check for $88, what does this situation imply?

What is the primary reason for bonding employees who handle cash?

The reconciliation of a bank statement should be prepared by:

The entry to record the collection of a $1,035 electronic funds transfer from a customer would be:

If a check correctly written and paid by the bank for $439 was incorrectly recorded on the company's books for $493, how should the error be treated on the bank reconciliation?

How should cash that is restricted for a special purpose, such as a plant expansion fund to be used in 3 years, be reported on the balance sheet?

A company's bank statement shows a credit memorandum for $1,035. This item is an unrecorded collection of an electronic funds transfer. This reconciling item would require which of the following adjusting entries?

What is the most important element of the fraud triangle, because without it, fraud cannot occur?

The ANATOMY OF A FRAUD box on page 338 describes a claims processing fraud at Colossal Healthcare. Which internal control principle was primarily violated?

The use of safes, vaults, time clocks, and television monitors are all examples of which principle of internal control?

A key feature of an imprest petty cash system is that it involves:

If a company has a negative balance in its bank account (an overdraft), how should it be reported on the balance sheet?

What is the journal entry to record a $425.60 NSF check from a customer on account?

In a bank reconciliation, which side are outstanding checks adjusted on?

A company has a beginning cash balance of $33,000. During the period, cash receipts were $1,035 from an EFT, and cash disbursements were $30 for service charges and $425.60 for an NSF check. The ending cash balance per books is $11,709.45. What is the adjusted cash balance?

Which of these is a limitation of internal control?

A petty cash fund was established with a balance of $100. It currently has $8 cash on hand and receipts for miscellaneous expenses totaling $90. The entry to replenish the fund would include:

What is the term for a company's own stock that it has issued and subsequently reacquired but not retired?

Which of the following is a primary purpose of internal control?

The 'ANATOMY OF A FRAUD' box on page 340 discusses a case where an accounts payable clerk, Angela Bauer, was able to perpetrate a fraud. Which two principles of internal control were most clearly violated?

Which of these reconciling items would result in an adjusting entry that credits Cash?

If a company has a cash balance per bank of $7,690.80, deposits in transit of $1,193.30, and outstanding checks of $1,860.10, what is its adjusted cash balance per bank?

Which action helps a company ensure the timely recording of transactions?

The 'rationalization' element of the fraud triangle refers to:

Which of the following items would NOT be included in the 'Cash and cash equivalents' line item on a balance sheet?

Segregating the duties of recordkeeping from physical custody is done primarily to:

The use of electronic funds transfers (EFTs) for payments improves internal control because:

If a company has a petty cash fund of $200 and it has receipts for $175 and $20 in cash, what is the amount of the cash shortage or overage?

The control activity that involves reviewing the work of other employees, such as reconciling a bank statement, is known as:

What is the primary reason that a bank reconciliation is necessary?

A restrictive endorsement such as 'For Deposit Only' is used as an internal control for which type of cash receipt?

Delta Air Lines reports restricted cash as a separate line item below its other current assets. Based on the discussion in the chapter, what does this imply?

Which of these is a human resource control activity designed to deter fraud?