1) The following set of items describes activities completed by a company in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.

A single employee in the mailroom opens the mail, counts the money received, and prepares a control list of the amount received.

a. Violates sound internal control procedures

b. Adheres to sound internal control procedures

c. Neither strengthens nor violates internal control

2) The following set of items describes activities completed by a company in collecting cash for merchandise sales. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.

Cash register tapes are picked up on a regular basis each day by an employee from the accounting department.

a. Violates sound internal control procedures

b. Adheres to sound internal control procedures

c. Neither strengthens nor violates internal control

3) Which of the following is an example of a debit memorandum?

a. Company error in recording a $500 deposit as $600

b. Interest earned on the account balance

c. Outstanding check

d. Service charge

4) Which of the following documents is used in the control of cash disbursements?

a. Income statement

b. Cash register tapes

c. Bank deposit slips

d. Receiving reports

5) Which of the following would not appear on a bank statement for a checking account?

a. Deposits

b. Outstanding checks

c. Interest earned

d. Service charges

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