ACC 231 UPDATED STUDY EXAMS GUIDE
QUESTIONS AND ANSWERS SURE A+
✔✔All of the following are objectives of internal control EXCEPT:
-To ensure accurate and reliable account records
-To comply with legal requirements
-To maximize net income
-To safeguard assets - ✔✔To maximize net income
✔✔All of the following are internal control procedures EXCEPT:
-Sarbanes-Oxley reforms
-Assignment of responsibilities
-Adequate records
-Internal and external audits - ✔✔Sarbanes-Oxley reforms
✔✔Three key duties that must always be separated under a good system of internal
controls are:
-asset handling, recordkeeping, and safeguarding of assets
-asset handling, hiring, and safeguarding of assets
-record keeping, transaction analysis, and transaction approval
, -Asset handling, recordkeeping, and transaction approval - ✔✔Asset handling,
recordkeeping, and transaction approval
✔✔Before paying an invoice for goods received on account, the controller or treasurer
should ensure that:
-The company is paying for the goods it ordered
-The company has not already paid this invoice
-The company is paying for the goods it actually received
-All of the above - ✔✔All of the above
✔✔An employee claims that he overstated expense reimbursement requests to have
extra money for his wife and children because "Everyone is doing it." This is an example
of:
-Understanding
-Motive
-Rationalization
-Opportunity - ✔✔Rationalization
✔✔Cash and cash equivalents do NOT include:
-Petty cash
-Time deposits
-High-grade U.S. government securities maturing in 5 years
-Bank checking account - ✔✔High-grade U.S. government securities maturing in 5
years
✔✔When calculating the quick ratio, ____________ is (are) included in the numerator.
-Short-term marketable securities
-Supplies
-Inventory
-Prepaid insurance - ✔✔Short-term marketable securities
[(CURRENT ASSETS not including inventory or prepaid expenses) / CURRENT
LIABILITIES
✔✔Nichols Company has shipped goods to one of its customers FOB shipping point.
Nichols Company will recognize sales revenue when:
-The goods leave Nichols' shipping dock
-The customer pays the invoice
-Their customer has received the goods
QUESTIONS AND ANSWERS SURE A+
✔✔All of the following are objectives of internal control EXCEPT:
-To ensure accurate and reliable account records
-To comply with legal requirements
-To maximize net income
-To safeguard assets - ✔✔To maximize net income
✔✔All of the following are internal control procedures EXCEPT:
-Sarbanes-Oxley reforms
-Assignment of responsibilities
-Adequate records
-Internal and external audits - ✔✔Sarbanes-Oxley reforms
✔✔Three key duties that must always be separated under a good system of internal
controls are:
-asset handling, recordkeeping, and safeguarding of assets
-asset handling, hiring, and safeguarding of assets
-record keeping, transaction analysis, and transaction approval
, -Asset handling, recordkeeping, and transaction approval - ✔✔Asset handling,
recordkeeping, and transaction approval
✔✔Before paying an invoice for goods received on account, the controller or treasurer
should ensure that:
-The company is paying for the goods it ordered
-The company has not already paid this invoice
-The company is paying for the goods it actually received
-All of the above - ✔✔All of the above
✔✔An employee claims that he overstated expense reimbursement requests to have
extra money for his wife and children because "Everyone is doing it." This is an example
of:
-Understanding
-Motive
-Rationalization
-Opportunity - ✔✔Rationalization
✔✔Cash and cash equivalents do NOT include:
-Petty cash
-Time deposits
-High-grade U.S. government securities maturing in 5 years
-Bank checking account - ✔✔High-grade U.S. government securities maturing in 5
years
✔✔When calculating the quick ratio, ____________ is (are) included in the numerator.
-Short-term marketable securities
-Supplies
-Inventory
-Prepaid insurance - ✔✔Short-term marketable securities
[(CURRENT ASSETS not including inventory or prepaid expenses) / CURRENT
LIABILITIES
✔✔Nichols Company has shipped goods to one of its customers FOB shipping point.
Nichols Company will recognize sales revenue when:
-The goods leave Nichols' shipping dock
-The customer pays the invoice
-Their customer has received the goods
