Survey Accounting 3rd Ed Chap 2 Test
Page 1 of 47
4
Student: _______________________________________________________________________________________
1. To have a strong internal control system, a business must have good administrative controls. Administrative controls include: A. B. C. D. the reconciliation of the bank statement. the accuracy of the recording procedures. assessing compliance with company policies. maintenance of accurate inventory records.
2. Which of the following statements concerning internal controls is true? A. Internal administrative controls are designed to limit the amount of funds spent on investments. B. The control procedure, separation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company. C. Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. D. A strong internal control system provides reasonable assurance that the objectives of a company will be accomplished. 3. Hyperion Company has established internal control policies and procedures in order to achieve the following objectives: (1) Safeguard the company's assets (2) Assure that the accounting records contain reliable information (3) Evaluate management performance effectively (4) Assure that employees comply with company policies Which of these objectives are primarily achieved by accounting controls? A. B. C. D. Objectives 1 and 2 Objectives 2 and 3 Objectives 3 and 4 Objectives 1 and 4
4. Which of the following is not a generally recognized internal control procedure? A. B. C. D. Establishment of clear lines of authority. The minimization of labor cost. Requiring regular vacations for employees. Having employees covered by a fidelity bond.
5. Which of the following statements accurately describes a fidelity bond? A. B. C. D. Insurance that the company buys to protect itself from loss due to employee dishonesty. Proper procedures for processing accounting transactions.
4
Student: _______________________________________________________________________________________
1. To have a strong internal control system, a business must have good administrative controls. Administrative controls include: A. B. C. D. the reconciliation of the bank statement. the accuracy of the recording procedures. assessing compliance with company policies. maintenance of accurate inventory records.
2. Which of the following statements concerning internal controls is true? A. Internal administrative controls are designed to limit the amount of funds spent on investments. B. The control procedure, separation of duties, prohibits the employment of a husband and wife or other closely related parties within the same company. C. Internal accounting controls are limited to the policies and procedures used to protect the company from embezzlement. D. A strong internal control system provides reasonable assurance that the objectives of a company will be accomplished. 3. Hyperion Company has established internal control policies and procedures in order to achieve the following objectives: (1) Safeguard the company's assets (2) Assure that the accounting records contain reliable information (3) Evaluate management performance effectively (4) Assure that employees comply with company policies Which of these objectives are primarily achieved by accounting controls? A. B. C. D. Objectives 1 and 2 Objectives 2 and 3 Objectives 3 and 4 Objectives 1 and 4
4. Which of the following is not a generally recognized internal control procedure? A. B. C. D. Establishment of clear lines of authority. The minimization of labor cost. Requiring regular vacations for employees. Having employees covered by a fidelity bond.
5. Which of the following statements accurately describes a fidelity bond? A. B. C. D. Insurance that the company buys to protect itself from loss due to employee dishonesty. Proper procedures for processing accounting transactions.