1. Internal control is defined, in part, as a plan that safeguards

a. all balance sheet accounts.

b. assets.

c. liabilities.

d. capital stock.

2. Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

a. increases the potential for errors and fraud.

b. decreases the potential for errors and fraud.

c. is an example of good internal control.

d. is a good example of safeguarding the company's assets.

3. Internal auditors

a. are hired by CPA firms to audit business firms.

b. are employees of the IRS who evaluate the internal controls of companies filing tax returns.

c. evaluate the system of internal controls for the companies that employ them.

d. cannot evaluate the system of internal controls of the company that employs them because they are not independent.

4.. If a petty cash fund is established in the amount of $100 and contains $5 in cash and $96 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

a. Petty Cash, $95.

b. Petty Cash, $96.

c. Cash, $95; Cash Over and Short, $1.

d. Cash, $96.

Important note:

PLEASE SHOW WORK FOR ALL QUESTIONS!