Which of the following is not a requirement of SOX Section 404?
a. Evaluate the design of the company's controls to determine if they adequately address the risk that a material misstatement of the financial statements would not be prevented or detected in a timely manner.
b. Gather and evaluate evidence about the operation of controls.
c. Implement key controls to determine their operating efficiency.
d. Present a written assessment of the effectiveness of internal control over financial reporting.
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Q. 2) Which financial statement shows Salaries expense?
A) Income statement
B) Statement of changes in shareholders' equity
C) Statement of cash flows
D) Balance sheet
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Q. 3) Check No. 450, a payment of 54 for the telephone bill, was incorrectly entered on the check stub as 45 . Which of the following adjustments needs to be made?
a. increase the bank statement balance
b. increase the book balance
c. decrease the bank statement balance
d. decrease the book balance
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Q. 4) On a bank reconciliation, outstanding checks and NSF checks are deductions from the bank balance.
Indicate whether the statement is true or false
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Q. 5) What is the major difference between a periodic and perpetual inventory system?
a. Under the periodic inventory system, the purchase of inventory will be debited to the Purchases account.
b. Under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory.
c. Under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the month.
d. All of the answers are correct.
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Q. 6) Beta Company reported the following information in its year ended December 31, 2012 financials:
Net income 15,000
Sales revenue 75,000
Retained earnings - beginning balance 16,000
Dividends 4,000
1. What were the company's total expenses?
2. How much of the company's profits have been kept by the company as of 1/1/12?
3. What is the balance of retained earnings at December 31, 2012?
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