MBA 510- EXAM 2 QUESTIONS AND
ANSWERS GRADED A+ 2026
True or False: Cash equivalents consist of short-term and long-term investments - ANS FALSE
Two clerks sharing the same cash register is a violation of which internal control principle? -
ANS Establish responsibilities
Three parties involves with a check are - ANS 1) maker
2) payee
3) bank (payer)
On a bank reconciliation, a bank fee for check printing not yet recorded by the company is : -
ANS deducted from the book of cash balance
Outstanding checks refer to checks that have been - ANS written by depositer, subtracted on
depositors books, and sent to payee, but not turned in for payment at the bank statement date
Cash, not including cash equivalents, includes: - ANS customer checks, cashier checks, and
money orders
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, True or False: The primary objective of internal control procedures is to safeguard the business
against theft from government agencies - ANS FALSE
True or False: separating the responsibility for a transaction between two or more individuals or
depts will not help prevent someone from creating a fictitious invoice and paying the money to
himself - ANS FALSE
True or False: Separation of recordkeeping for assets from the custody over assets does not
prevent collusion between two or more employees to commit fraud - ANS TRUE
True or False: establishing responsibilities helps determine who is at fault for errors or fraud -
ANS TRUE
The _______ category includes items that are acceptable for deposit in bank accounts such as
customer checks, cashier's checks, and money orders - ANS CASH
The __________ category includes short-term, highly liquid investment assets that are readily
convertible to a known cash amount and sufficiently close to their due dates so that their
market value will not greatly change - ANS cash equivalents
Summarizes projected cash payments and cash receipts - ANS cash budget
True or False: Separation of duties eliminates the possibility of collusion to steal and asset and
hide theft from the records - ANS FALSE
True or false: A voucher system of control improves internal control of cash payments -
ANS True
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
ANSWERS GRADED A+ 2026
True or False: Cash equivalents consist of short-term and long-term investments - ANS FALSE
Two clerks sharing the same cash register is a violation of which internal control principle? -
ANS Establish responsibilities
Three parties involves with a check are - ANS 1) maker
2) payee
3) bank (payer)
On a bank reconciliation, a bank fee for check printing not yet recorded by the company is : -
ANS deducted from the book of cash balance
Outstanding checks refer to checks that have been - ANS written by depositer, subtracted on
depositors books, and sent to payee, but not turned in for payment at the bank statement date
Cash, not including cash equivalents, includes: - ANS customer checks, cashier checks, and
money orders
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
1
, True or False: The primary objective of internal control procedures is to safeguard the business
against theft from government agencies - ANS FALSE
True or False: separating the responsibility for a transaction between two or more individuals or
depts will not help prevent someone from creating a fictitious invoice and paying the money to
himself - ANS FALSE
True or False: Separation of recordkeeping for assets from the custody over assets does not
prevent collusion between two or more employees to commit fraud - ANS TRUE
True or False: establishing responsibilities helps determine who is at fault for errors or fraud -
ANS TRUE
The _______ category includes items that are acceptable for deposit in bank accounts such as
customer checks, cashier's checks, and money orders - ANS CASH
The __________ category includes short-term, highly liquid investment assets that are readily
convertible to a known cash amount and sufficiently close to their due dates so that their
market value will not greatly change - ANS cash equivalents
Summarizes projected cash payments and cash receipts - ANS cash budget
True or False: Separation of duties eliminates the possibility of collusion to steal and asset and
hide theft from the records - ANS FALSE
True or false: A voucher system of control improves internal control of cash payments -
ANS True
@COPYRIGHT 2026/2027 ALL RIGHTS RESERVED
2
