1. Which of the following is the focus of an audit of cash for most companies?

a) General cash account.

b) Payroll cash account.

2. Which of the following items on a bank reconciliation would require an adjusting entry
on the company’s books?
a) An error by the bank.
b) A bank service charge.
 
3. Which of the following is not a “cash equivalent”?
a) Time deposits. 
b) Marketable securities.

4. The audit objective of determining that cash in bank, as stated on the reconciliation, foots
correctly and agrees with the general ledger can be tested by which of the following
procedures?
a) Performing tests for kiting.
b) Footing the outstanding checks list and the list of deposits in transit.

5. Which of the following is a cash equivalent?

a) Certificates of deposit
b) Notes payable
 
 
6. An auditor performs a proof of cash to verify that ?
a) All deposits in the bank were recorded in the accounting records
b) All recorded cash disbursements were paid by the bank
c) All recorded cash receipts were deposited
d) All of the above
 
 

7. The following are the common controls over cash except ?

a) Segregation of duties 
b) Computerized control totals and edits tests
c) Perform an overall estimate of depreciation expense
d) Independent bank reconciliations by employees who do not handle cash

8. The auditor should ordinarily send confirmation requests to all banks with which the
client has conducted any business during the year, regardless of the year-balance,
because?
a) This procedure will detect kiting activities that would otherwise not be detected
b) The confirmation form also seeks information about indebtedness to the
bank
 c) The sending of confirmation requests to all such banks is required by auditing
standards
d) This procedure relieves the auditor of any responsibility with respect to
nondetection of forged checks
 

9. Which of the following is not a basic characteristic of a system of cash control?

a) Use of a voucher system
b) Combined responsibility for handling and recording cash
 
 

10. Which of the following cycles does not affect cash in bank?
a) Capital acquisitions cycle.
b) Inventory and warehousing.

11. Which of the following procedures that may uncover fraud in the cash receipts area?
a. Confirmation of accounts receivable
b. Examination of approvals and supporting documentation for bad debts and sales
returns and allowances
c. Review of the general ledger entries in the cash account for unusual items
d. All of the above