Question 1

Which of the following is NOT one of the three elements of the fraud triangle?

Accepted Answer

Collusion

Question 2

A company discovers that an employee has been reimbursed twice for the same travel expense. According to the ACFE, this is an example of which type of expense reimbursement fraud?

Accepted Answer

Multiple reimbursements

Question 3

Which of the following is a primary objective of an internal control system?

Accepted Answer

Safeguard assets

Question 4

A company’s bank reconciliation shows a deposit in transit of $$2,000 and outstanding checks totaling 1$$,500. If the bank statement shows an ending balance of $10,000, what is the adjusted bank balance?

Accepted Answer

$10,000 + 2,000 - 1,500 = 10,500

Question 5

Which of the following is an example of a preventative internal control procedure?

Accepted Answer

Separation of duties

Question 6

A company’s cash account shows a balance of $$5,000. The bank statement shows a balance of 5$$,300. There is a $$400 outstanding check and a 100 $$deposit in transit. What is the adjusted book balance?

Accepted Answer

$5,000 + 100 - 400 = 4,700

Question 7

Which of the following is NOT considered a cash equivalent on the balance sheet?

Accepted Answer

Apple stock

Question 8

Which internal control procedure is best described as limiting employee access to assets based on job responsibilities?

Accepted Answer

Limited access

Question 9

A company’s accounting department discovers that a check for $$250 was recorded as 520 in $$the books. What adjustment should be made during the bank reconciliation?

Accepted Answer

Add $270 to the book balance

Question 10

Which of the following is a limitation of internal controls?

Accepted Answer

They can be circumvented by collusion

Question 11

Which of the following best describes the purpose of a bank reconciliation?

Accepted Answer

To ensure the company’s cash records match the bank’s records

Question 12

Which of the following is an example of a detective (monitoring) control?

Accepted Answer

Bank reconciliation

Question 13

A company’s bank statement includes a $50 NSF check. What is the correct journal entry to adjust the book balance?

Accepted Answer

Debit Accounts Receivable $$50; Credit Cash 50$$

Question 14

Which of the following is a reason why companies use checks or EFTs for payments?

Accepted Answer

To provide a record of payment and require authorization

Question 15

Which of the following best describes unsupervised machine learning in the context of expense reimbursement fraud detection?

Accepted Answer

A model that flags unusual receipts for human investigation

Question 16

A company’s bank reconciliation includes the following: deposit in transit $$1,200, outstanding checks 800$$, bank service charge $$30, and interest earned 20. If $$the bank statement shows $5,000, what is the adjusted bank balance?

Accepted Answer

$5,000 + 1,200 - 800 = 5,400

Question 17

Which of the following is NOT a component of an internal control system?

Accepted Answer

Financial leverage

Question 18

Which of the following is a real-world example of a control procedure that can prevent fraud in a retail store?

Accepted Answer

Requiring two employees to count cash drawers at the end of each shift

Question 19

Which of the following best explains why the adjusted bank balance and adjusted book balance should be equal after completing a bank reconciliation?

Accepted Answer

All timing differences and errors have been identified and corrected

Question 20

A company’s internal control system includes mandatory vacations for employees in the accounting department. What is the primary purpose of this control?

Accepted Answer

To detect and prevent fraud

Internal Control and Cash: Study Notes for Financial Accounting

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