Accounting 2036 Prestigiacomo Test 2 Questions with Complete Answers Edition.

Fraud Definition - Answer An attempt to deceive others for personal gain 3 Parts of Fraud Triangle - Answer Incentive, rationalization, opportunity Internal Control Objectives - Answer Actions taken by all levels of an organization to achieve its objectives Why can't internal control completely prevent and detect errors and fraud? - Answer Human error/fraud - Benefits must exceed the costs Why are internal controls for cash important? - Answer Because of the large volume of cash transactions and poses a high risk of theft Businesses receives cash in two ways - Answer Cash in person, or cash through EFT Primary goal of cash receipts - Answer ensure that businesses correctly deposit an amount of cash EFTs is also known as - Answer Direct deposits to reduce the risk of a bank over/underpaying an employee this system is used - Answer Imprest system Petty cash - Answer Dollar bills and coins What is used to reimburse employee for small expenditures made on behalf of the organization - Answer Petty Cash Bank reconciliation - Answer Internal report prepared to verify the accuracy of the bank statement and the cash accounts your bank may not know about - Answer Errors made by the bank, deposits made or checks written recently (Time lags)