Tag: Accounting

The following is an example of a computer control which operates in the payroll system at Big Staffie Ltd.

For the example below, select the type of computer control which it illustrates.

– Password protection limiting access to data 

Select ONE answer:

1. Specific
2. Non-Specific
3. General
4. Application

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => Password protection constitutes a general control.
4. Not correct

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The following is an example of an internal control that operates at Elm plc:

• The payables ledger clerk posts invoices to the payables ledger. The cash book clerk posts cash receipts to the payables ledger.

For the example above, select the type of control activity which it illustrates.

Select ONE answer:

1. Information processing
2. Segregation of duties
3. Performance review
4. Performance review

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct => Having separate clerks recording purchase invoices and posting cash payments in the payables ledger reduces the risk of fraud and error (is therefore a segregation of duties control).
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

The following is an example of an internal control that operates at Elm plc:

• The financial controller reconciles the payables ledger to the payables ledger control account every month.

For the example above, select the type of control activity which it illustrates.

Select ONE answer:

1. Information processing
2. Performance review
3. Segregation of duties
4. Performance review

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Reconciliations are information processing as they are undertaken to check the completeness and accuracy of information.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

One of the five elements of internal control is “monitoring of controls”.

• Which ONE of the following is an activity which would be used to monitor controls?

Select ONE answer:

1. Authorisation of purchase invoices before they are paid
2. Authorisation of purchase orders by the department manager
3. Authorisation of sales invoices before being issued to the client for accuracy and completeness
4. Internal auditors’ evaluation of whether the sales team are following company policy regarding customer discounts

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => All the other options are specific control activities (relating to authorisation).

This work is licensed under a Creative Commons Attribution 4.0 International License.

One of the five elements of internal control is “monitoring of controls”.

• Which ONE of the following is an activity which would be used to monitor controls?

Select ONE answer:

1. Authorisation of purchase invoices before they are paid
2. Authorisation of purchase orders by the department manager
3. Management’s review of whether bank reconciliations are being prepared on a timely basis
4. Authorisation of sales invoices before being issued to the client for accuracy and completeness

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct => All the other options are specific control activities (relating to authorisation).
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.