Fundamental Accounting Principles 23rd Edition By John Wild – Test Bank

True/False

1) A properly designed internal control system is a key part of systems design, analysis, and performance.
A) True
B) False
Answer: A Explanation:
Diff: 1
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; BB Leveraging Technology; FN Leveraging Technology

2) The use of internal controls provides a guarantee against losses due to operating activities.
A) True
B) False
Answer: B Explanation:
Diff: 1
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; FN Leveraging Technology

3) Maintaining adequate records is an important internal control principle.
A) True
B) False
Answer: A Explanation:
Diff: 1
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; FN Leveraging Technology

4) Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control.
A) True
B) False
Answer: B Explanation:
Diff: 2
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Understand
AACSB: Technology
AICPA: BB Industry; FN Leveraging Technology

5) Cash registers, time clocks, and personal identification scanners are examples of technologies that can improve internal control.
A) True
B) False
Answer: A Explanation:
Diff: 1
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; BB Leveraging Technology; FN Leveraging Technology

6) An internal control system consists of the policies and procedures companies use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies.
A) True
B) False
Answer: A Explanation:
Diff: 1
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; BB Leveraging Technology; FN Leveraging Technology

7) Insuring assets and requiring all accounting personnel to have CPA licenses are two important principles of internal control.
A) True
B) False
Answer: B Explanation:
Diff: 2
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Remember
AACSB: Technology
AICPA: BB Industry; BB Leveraging Technology; FN Leveraging Technology

8) Because employees know that bonding is an insurance policy against loss from theft, bonding does not generally discourage loss from theft.
A) True
B) False
Answer: B Explanation:
Diff: 2
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Understand
AACSB: Communication
AICPA: BB Industry; FN Risk Analysis

9) According to good internal control policies, a person who controls an asset also maintains that asset’s accounting records.
A) True
B) False
Answer: B Explanation:
Diff: 2
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Understand
AACSB: Technology
AICPA: BB Industry; FN Risk Analysis

10) Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.
A) True
B) False
Answer: B Explanation:
Diff: 2
Topic: Internal Control
Learning Objective: 08-C1 Define internal control and identify its purpose and principles. Bloom’s: Understand
AACSB: Technology
AICPA: BB Leveraging Technology; FN Leveraging Technology