MULTIPLE CHOICE. Choose the one alternative that best completes the statement or
ID: 2564494 • Letter: M
Question
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) All of the following are purposes of internal control EXCEPT A) to ensure accurate and reliable accounts records B) to promote operational inefficiency C) to encourage adherence to company policies 1) to safeguard assets 2) Which characteristic will NOT be found in an effective system of internal control? 2) A)A combination of duties B) Competent, reliable, and ethical personnel C) A separation of duties D) Documents and records 3) A plan of organization and a system of procedures, implemented by company management and 3 the board of directors, is called A) the Sarbanes-Oxley Act. C) internal control. B) the budget D) the audit. 4) SOX created a new body to oversee the audits of public companies called the A) Securities and Exchange Commission. B) Association of Certified Fraud Examiners. C) Public Company Accounting Oversight Board. D) Association of Certified Public Accountants. 5) An examination of the company's financial statements and its accounting system, including its controls, is: A) a budgeting system. C) a monitoring system. B) an audit. D) none of the above. 6) The beginning cash balance is $3,000, estimated cash receipts are $105,000, and estimated cash disbursements are $111,000. How much cash must be borrowed to have a desired ending balance of $5,0002 A) $8,000 B) $6,000 C) $2,000 D) $5,000 7) Realized gains and losses occur when: A) the cost of the investment differs from the current market value. B) the investment is sold. C) the investment has not been sold. D) both B and Coccur 8) The use of the allowance method of accounting for bad debts is preferred over the direct write-off method because of the: A) historical cost principle. C) full disclosure principle. B) matching principle. D) revenue recognition principle. A-1Explanation / Answer
Answer 1:
Internal controls are defined as the checks that the company puts on the internal processes so that company is able to promote efficiencies when it comes to the business operations, to safeguard the assets tec. The main aim of the internal controls is to adhere to the compliance to the policies of the company as well. It is to ensure that nothing goes to waste and there is minimum wastage in the company.
Hence, the correct option is B.
Answer 2:
An effective system of an internal control would comprise of the control environment, the risk assessment processes of the company, the information system, the activities to be controlled and the monitoring of these controls. The control environment includes the governance and the management of the business functions. Risk assessment process include the ways using which the management assesses the risk for the company. The information system include the objectives of the financial reporting which aim at fixing the internal control procedures for the transactions. Controlling activities include the fact that the management directions are being followed throughout the company. Monitoring these control means the assessment of these controls and remedial measures to be undertaken to ensure that compliance is taking place. Internal control would mean fixation of the individual duties of the personnel. Hence, the correct answer would be the combination of duties.
Therefore, the correct answer is A.
Answer 3:
Internal controls are defined as the checks that the company puts on the internal processes so that company is able to promote efficiencies when it comes to the business operations, to safeguard the assets tec. The main aim of the internal controls is to adhere to the compliance to the policies of the company as well. It is to ensure that nothing goes to waste and there is minimum wastage in the company.
Hence, the correct option is C.
Answer 4:
SOX is the legislation that has been passed by the US Congress in order to protect the general public and the shareholders from the accounting errors and fraudulent practices in the company. It aims at improving the accuracy of the corporate disclosures. And also, it overseas the Public Company Accounting Oversight Board.
Hence the correct option is C.
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