Question 1: The two most common types of fraud impacting financial statements are
- fraudulent financial reporting and e-commerce fraud.
- misappropriation of assets and embezzlement.
- fraudulent financial reporting and misappropriation of assets.
- cooking the books and fraudulent financial reporting.
Question 2: Which of the following is a true statement regarding fraud?
- Fraud is committed when an error is made.
- Fraud does not occur in not-for-profit organizations.
- The expansion of e-commerce has caused fraud to decrease.
- Most businesses surveyed had experienced fraud.
Question 3: Internal control is a plan of organization and system of procedures implemented by company _____ and the _____ designed to accomplish five objectives.
- internal auditors, employees
- external auditors, management
- management, board of directors
- employees, board of directors
Question 4: A fidelity bond is a(n)
- employment contract for a specified period of time.
- insurance policy that reimburses a company for employee theft.
- contract prohibiting former employees from working for a competitor.
- promise by a company to safeguard customers' personal information.
Question 5: Proper separation of duties and physical safeguards to protect assets from theft are part of a company's
- information system.
- control procedures.
- control monitoring.
- personnel maintenance.
Question 6: E-commerce pitfalls include all of the following except
- stolen credit card numbers.
- phishing expedition.
- encryption reporting.
- Trojan horses.
Question 7: When preparing a bank reconciliation, which of the following items should be added to the book balance?
- EFT receipts
- Deposits in transit
- Collection items
- Both EFT receipts and collection items
Question 8: Which of the following is an accurate statement regarding cash receipts over the counter?
- The point-of-sale terminal electronically transmits a record of the sale to the store's main computer.
- Employees should take the deposit to the bank.
- The cashier should reconcile the electronic record of the sales per the terminal to the record of cash received.
- Point-of-sale terminals cannot assist in inventory control.
Question 9: Another name for short-term investments is
- equity investments.
- marketable securities.
- market investments.
- available-for-sale securities.
Question 10: A business offers credit terms of 1/15, n/30. These terms indicate that
- the total amount of the invoice must be paid within 15 days.
- a discount of 1% can be taken if the invoice is paid within 15 days.
- the buyer can take a 1% discount if the bill is paid within 15 or 30 days.
- no discount is offered for early payment.