Quiz 7 Flashcards
When preparing a bank reconciliation, if the adjusted book balance and the adjusted bank balance are equal, then there is no need to have an external auditor test internal controls for the “cash” account
false
the use of internal controls provides guaranteed protection against losses due to operating activities
false
an internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting and promote efficient operations
true
the principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate record-keeping and custody of assets, and perform internal and internal audits
true
risk involved in e-commerce include: credit card theft, computer viruses and impersonation
true
firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce
true
separation of duties divides responsibility for a series of transactions between two or more employees or departments despite the increased complexity separation of duties reduces the risk of error and fraud
true
Cash consists of cash on hand and demand deposits this includes coins currency and amounts on deposits in bank accounts chequing accounts and some saving accounts
true
Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations
true
If cash over and short has a debit at the end of the period the dollar amount represents miscellaneous revenus
false
cash sales total $750 and the amount of cash in the register is $685 the shortage of $20 represents an expense
true
the petty cash account is a separate chequing account used for small anounts
false
all monies disbursed from petty cash should be documented by a petty cash receipt
true
the journal entry for petty cash reimbursement is a debit to various expenses and a credit to petty cash
false
the petty cash fund should be reimbursed at the period even if the fund is not low on money
true