ACCT 4301 Chapter 16 Concepts Pt. 2 Questions and Correct Answers

A primary purpose of the proof of cash is to A. Prevent fraud. B. Reconcile actual cash receipts and disbursements to budgeted receipts and disbursements. C. Investigate variances from expected cash balances. D. Ensure that all cash receipts recorded in the cash receipts journal were deposited in the bank account. Ensure that all cash receipts recorded in the cash receipts journal were deposited in the bank account. A company has additional temporary funds to invest. The Board of Directors decided to purchase marketable securities and assigned the future purchase and sale decisions to a responsible financial executive. The best person(s) to make periodic reviews of the investment activity authorized by that executive should be A. An investment committee of the Board of Directors. B. The chief operating officer. C. The corporate controller. D. The treasurer. An investment committee of the Board of Directors A company holds bearer bonds as a short-term investment. Responsibility for custody of these bonds and submission of coupons for collections of periodic interest probably should be delegated to the A. Chief Accountant. B. Internal Auditor. C. Cashier. D. Treasurer. Treasurer Which of the following controls would an entity most likely use in safeguarding against the loss of marketable securities? A. An independent trust company that has no direct contact with the employees who have recordkeeping responsibilities has possession of the securities. B. The internal auditor verifies the marketable securities in the entity's safe each year on the balance sheet date. C. The independent auditor traces all purchases and sales of marketable securities through the subsidiary ledgers to the general ledger. D. A designated member of the board of directors controls the securities in a bank safe-deposit box. An independent trust company that has no direct contact with the employees who have recordkeeping responsibilities has possession of the securities Which of the following procedures most likely would give the greatest assurance that securities held as investments are safeguarded? A. There is no access to securities between the year-end and the date of the auditor's security count. B. Proceeds from the sale of investments are received by an employee who does not have access to securities. C. Investment acquisitions are authorized by a member of the Board of Directors before execution. D. Access to securities requires the presence of two designated officials. Access to securities requires the presence of two designated officials