MGMT 200 EXAM 2 2026 MOCK EXAM
PRACTICE SET WITH SOLUTIONS A+
◉ Internal Control. Answer: Policies and procedures used to protect
assets, ensure reliable reporting, promote efficiency, and encourage
compliance.
◉ Control Environment. Answer: "Tone at the top"; the overall
culture/ethics and oversight that influence how seriously controls
are taken.
◉ Risk Assessment. Answer: The process of identifying and
analyzing risks that could prevent a company from meeting its
objectives.
◉ Control Activities. Answer: Specific actions/procedures
(approvals, reconciliations, safeguards) used to reduce risk.
◉ Information and Communication. Answer: Systems that capture
and share financial/operational information so people can do their
jobs correctly.
◉ Monitoring. Answer: Ongoing evaluation of internal control to
make sure it works and is updated when needed.
, ◉ Segregation of Duties. Answer: Splitting responsibilities so one
person does not control authorization, custody of assets, and
recordkeeping.
◉ Authorization. Answer: Approval required before a transaction
happens (prevents unauthorized spending or actions).
◉ Physical Controls. Answer: Safeguards like locks, passwords, and
restricted access that protect assets and records.
◉ Independent Verification. Answer: A separate person checks
work/records to catch errors or fraud.
◉ Reasonable Assurance. Answer: The idea that internal controls
reduce risk but cannot guarantee perfect prevention of errors/fraud.
◉ Cash. Answer: Currency, coins, and funds in checking accounts
available for use immediately.
◉ Cash Equivalents. Answer: Short-term, highly liquid investments
that can be quickly converted to a known amount of cash with low
risk.
PRACTICE SET WITH SOLUTIONS A+
◉ Internal Control. Answer: Policies and procedures used to protect
assets, ensure reliable reporting, promote efficiency, and encourage
compliance.
◉ Control Environment. Answer: "Tone at the top"; the overall
culture/ethics and oversight that influence how seriously controls
are taken.
◉ Risk Assessment. Answer: The process of identifying and
analyzing risks that could prevent a company from meeting its
objectives.
◉ Control Activities. Answer: Specific actions/procedures
(approvals, reconciliations, safeguards) used to reduce risk.
◉ Information and Communication. Answer: Systems that capture
and share financial/operational information so people can do their
jobs correctly.
◉ Monitoring. Answer: Ongoing evaluation of internal control to
make sure it works and is updated when needed.
, ◉ Segregation of Duties. Answer: Splitting responsibilities so one
person does not control authorization, custody of assets, and
recordkeeping.
◉ Authorization. Answer: Approval required before a transaction
happens (prevents unauthorized spending or actions).
◉ Physical Controls. Answer: Safeguards like locks, passwords, and
restricted access that protect assets and records.
◉ Independent Verification. Answer: A separate person checks
work/records to catch errors or fraud.
◉ Reasonable Assurance. Answer: The idea that internal controls
reduce risk but cannot guarantee perfect prevention of errors/fraud.
◉ Cash. Answer: Currency, coins, and funds in checking accounts
available for use immediately.
◉ Cash Equivalents. Answer: Short-term, highly liquid investments
that can be quickly converted to a known amount of cash with low
risk.
