ACC 201 Chapter 7

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20 Questions - Developed by: Karli - Developed on: - 4.867 taken

  • 1
    Internal control is mainly concerned with the amount of authority a supervisor exercises over a subordinate
  • 2
    A highly automated computerized system of accounting eliminates the need for internal control
  • 3
    The safeguarding of assets is an objective of a company's system of internal control
  • 4
    Management is responsible for establishing a system of internal control
  • 5
    Internal control is most effective when several people are responsible for a given task
  • 6
    The responsibility for keeping the records for an asset should be separate from the physical custody of that asset
  • 7
    Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency
  • 8
    The extent of internal control features adopted by a company must be evaluated in terms of cost-benefit
  • 9
    An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other
  • 10
    Only large companies need to be concerned with a system of internal control
  • 11
    The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals
  • 12
    In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry
  • 13
    Firms use physical controls primarily to safeguard their assets
  • 14
    A segregation of duties among employees eliminates the possibility of collusion
  • 15
    For efficiency of operations and better control over cash, a company should maintain only one bank account
  • 16
    Cash registers are an important internal control device used in controlling over-the-counter receipts
  • 17
    Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check
  • 18
    Control over cash disbursements is improved if major expenditures are paid by check
  • 19
    In a voucher system, vouchers are prepared in the accounts receivable department
  • 20
    Electronic funds transfer (EFT) is a disbursement system that uses telephone or computer to transfer cash from one location to another

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