Intermediate Accounting Exam questions and verified correct answers

Internal control is defined as a process, affected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in: 1. Effectiveness and efficiency of operations. 2. Reliability of financial advice 3. Compliance with local ordinances. 4. All of the above are correct - correct answer 4 Cash consists of all of the following except 1. bank drafts. 2. certified checks. 3. money orders. 4. money market funds. - correct answer 4 The minimum cash amounts that banks often require customers to whom they lend money to are: 1. bank overdrafts. 2. cash equivalents. 3. compensating balances. 4. money market funds. - correct answer 3 An example of a cash equivalent is 1. cashier's checks. 2. certificates of deposit.