ACCT 2010 - Chapter 4 Review Questions and Correct Answers

A primary benefit of performing a bank reconciliation is: accuracy of cash reported in the balance sheet. accuracy of liabilities reported in the balance sheet. accuracy of revenues reported in the income statement. accuracy of cash reported in the balance sheet. A bank reconciliation reconciles the difference between the bank's balance of cash and the company's balance of cash related to: errors and fraud. timing differences. both timing differences and errors and fraud represent differences that should be reconciled. both timing differences and errors and fraud represent differences that should be reconciled. An example of internal controls over cash includes: a bank reconciliation. disclosures by management related to planned operations. a balance sheet provided to investor at the end of the year. a bank reconciliation. The primary purpose(s) of a company's internal controls is (are) to: improve the accuracy and reliability of accounting information. both safeguard a company's assets and improve the accuracy and reliability of accounting information are purposes of internal controls. safeguard a company's assets. both safeguard a company's assets and improve accuracy and reliability of accounting information are purposes of internal controls. A primary benefit of internal controls over cash is to improve: creditors understanding of a company's total obligations. the amounts reported in the statement of cash flows. management's ability to assess which of its company's products is most profitable. the amounts reported in the statement of cash flows Internal controls include activities meant to: both detect errors or fraud that have occurred and prevent errors or fraud in the first place are purposes of internal controls. detect errors or fraud that have occurred. prevent errors or fraud in the first place. both detect errors or fraud that have occurred and prevent errors or fraud in the first place are purposes of internal controls. An example of internal controls over cash includes: maintaining equipment to promote workplace safety. accounting for employee purchases. safeguarding inventory from employee theft. accounting for employee purchases. Accounting for employee purchases includes: both petty cash fund and company-issued debit and credit cards represent employee purchases. company-issued debit and credit cards. petty cash fund. both petty cash fund and company-issued debit and credit cards represent employee purchases. A primary benefit of correctly accounting for employee purchases is: accuracy of liabilities reported in the balance sheet. accuracy of cash reported in the balance sheet. accuracy of revenues reported in the income statement. accuracy of cash reported in the balance sheet. A primary benefit of internal controls over cash is to improve: management's ability to respond to timely decision on payment of debt. reporting accuracy of inflows and outflows of cash. investors' understanding of demand for the company's products and services. reporting accuracy of inflows and outflows of cash. Which of the following is not an element of the fraud triangle? Education Motivation Rationalization Opportunity Education