1. External control includes control over the assets as well as ways of monitoring the company's operations. true or false

2. Once an effective internal control system is in place, monitoring employees and systems is no longer required. true or false

3. A credit memo from the bank means the bank is decreasing your balance. true or false

4. The drawer is the one receiving a cheque. true or false

5. The drawer writes the cheque. true or false

6. Accounting can only record transactions using paper money. true or false

7. The entry to establish the petty cash fund was not completed. This would cause

a. cash to be overstated

b. assets to be understated.

c. cash to be understated.

d. assets to be overstated.

8. The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include

a. notification from the bank of a customer's NSF cheque.

b. correction of any errors or omissions on the bank statement.

c. deposits in transit.

9. Determine the adjusted cash balance per bank for Egg Packaging on April 30, from the following information:

Cash balance on the bank statement $2,500

Customer's cheque returnedNSF 500

Customer's note collected by the bank 600

Deposits in transit, April 30 1,400

Outstanding cheques, April 30 2,650

10. On a bank reconciliation, deposits added to the bank statement side are called

a. late deposits.

b. deposits on hold

c. outstanding deposits.

d. deposits in transit.

11. Internal control over a company's assets should include the following policy:

a. Responsibilities and duties of employees will be divided.

b. All cash receipts will be deposited into the bank the same day they arrive.

c. All cash payments will be made by cheque (except petty cash).

d. All of these answers are correct.

12. The objectives of internal control are to ensure efficient operations and provide reasonable assurance of all of the following EXCEPT

a. business information is accurate.

b. employees and managers comply with laws and regulations.

c. profits are maximized while minimizing spending.

d. assets are safeguarded and used for business purposes.

13. The drawee is the

a. bank that drawer has an account with.

b. person who reconciles the account.

c. person who writes the cheque.

d. person to whom the cheque is payable.