2. Which of the following scenarios is an example of a strong internal control?

1. Which of the following best illustrates the purpose of internal controls in a growing retail business? 

6. Which of the following would appear as an adjustment to the book balance in a bank reconciliation? 

3. What is the primary function of segregation of duties in internal control?

14. If a company mistakenly counts its ending inventory as higher than its actual amount, what is the effect on net income?

10. If a company’s bank reconciliation shows a bank error that incorrectly deducted $500 from the company’s account, how should this be handled? 

11. Maxwell Auto Parts had a beginning balance in accounts receivable of $12,000. It made sales of $25,000 on account and collected $18,000 in cash. What is the ending balance of accounts receivable?

5. What is the purpose of the matching principle?

14. A company receives a customer payment in advance for services to be performed next month. How should this be recorded?

7. The revenue recognition principle states that revenue should be recognized when: