Brittany Nielsen.ACC 340 ACC 340 Midterm

School: Southern New Hampshire University - Course: ACCOUNTING ACC 340 - Subject: Accounting

Midterm Exam 1)Would it be okay if your AR Clerk, who handles receipts, also reconciles the bank statement at the end of the month? Why or why not? It would not be okay for the same person to handle receipts and bank reconciliations. By not segregating duties and separating the cash receipt and bank reconciliation functions it could leave the company's assets vulnerable to fraud. The AR Clerk could easily alter information and pocket the money. 2)The company's environment has two aspects. One is the external environment. Which of the following is not an external environment factor? a.Economic b.Technical c.Social d.Tone at the Top 3)Name two methods that are commonly used to speed up the collection of receivables. Collections can be sped up in several ways including through the use of a lockbox and remote deposit capture. A lockbox allows payments to be sent directly to the bank or remittance processor for processing and deposit which provides faster funds availability and better security and reliability. A remote deposit capture is when one send an image of a check to the bank for processing rather than taking the actual check to the bank. 4)Match the description of the controls with the financial area the control would pertain to. (some matching items may be used more than once) Question Items A - All check stock must be locked up when not in use. A.Cash B -Review all employee advances with the payroll and payables staff at least once per month. C.Prepaid Expenses C - Require approval of bad debt writeoffs. ACC 340 Midterm1

B.Accounts Receivable D - Audit shipment terms. F.Inventory E - Require approval of bad-debt writeoff. B.Accounts Receivable F-Review Uncashed Checks. A.Cash G- Audit the receiving dock. F.Inventory H - Compare capital investment projections to actual results. D.Fixed Assets I -Require supervisory approval of all borrowings and repayments. E.Debt J - Require approval of credits. B.Accounts Receivable K- Perform a physical inventory of plant equipment every three months. D.Fixed Assets Matching Items Answer Items A. Cash B. Accounts Receivable C. Prepaid Expenses D. Fixed Assets E. Debt F. Inventory