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ACTG 2200 EXAM 2 WITH QUESTIONS AND 100% 100% ALL SURE ANSWERS
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ACTG 2200 EXAM 2 WITH QUESTIONS AND 100% 100% ALL SURE ANSWERS
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9/4/24, 3:46 AMJACKLINE
ACTG 2200 EXAM 2 WITH QUESTIONS AND 100% 100% ALL SURE ANSWERS
Terms in this set (109)
CHAPTER 4 CHAPTER 4
Reconcile the bank's cash balance by determining which transactions have been recorded by the
company but NOT YET recorded by the bank
Preparing a Bank Reconciliation (#1-2)
Bank & company's cash balances should BALANCE by the end
The dollar amount of an error that would result in an investor not investing in your company.
Materiality
A material error is unethical. An immaterial error will be small enough that an investor would not
change their mind to invest, had they known about it.
ACTG 2200 EXAM 2
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, 9/4/24, 3:46 AM
1. Amount?
(difference in balances)
2. Which side?
(Books? Bank?)
3. Positive (+) or negative (-)?
Bank Reconciliation - the error (#1-2)
Ex:
Error: 530
Correct amount: 350
Difference: 180
Control Environment, Risk Assessment, Control Activities, Monitoring, Information and
Definition of the Framework of Internal Controls:
Communication
Sets the overall ethical tone of the company with respect to internal control. It includes formal
Control Environment policies related to management's philosophy, and assignment of responsibilities and
organizational structure.
The control environment is set from top management. Therefore, the attitudes of top
management will permeate the employee actions. If top management is ethical and control
Control Environment (definition)
conscious then employees are likely to treat the company's assets wit respect. If top
management's behavior is unethical, then it is reasonable to expect employees to act unethically.
Identifies and analyzes internal and external risk factors that could prevent a company's
Risk Assessment
objectives from being achieved.
Policies and procedures that help ensure that management's directives are being carried out.
Control Activities
These activities include authorizations, reconciliations, and separation of duties.
Monitoring of internal activities and reporting of deficiencies is required. Monitoring includes
Monitoring
formal procedures for reporting control deficiencies.
Companies must have methods for collecting relevant information and communication in a timely
Information and Communication
manner.
Monthly financial statements or other documents being reviewed by managers. Daily manager
Information and Communication (example) review of tickets or cash drawers. Managers must then communicate any unusual findings to
ensure internal controls are appropriate and being followed by employees.
ACTG 2200 EXAM 2
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