Business And Internal Control

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Business And Internal Control - Quiz

In the business world, there are different types of people who are required in a company for it to run smoothly and internal controls come in handy. Take this quiz to gauge your knowledge of the subject.


Questions and Answers
  • 1. 

    Which of the following is not a part of front office internal control?

    • A.

      Tracking transaction documentation

    • B.

      Creating a guest history record

    • C.

      Verfifying account entries and balances

    • D.

      Identifying vulnerabilities in the accounting system

    Correct Answer
    B. Creating a guest history record
    Explanation
    Creating a guest history record is not a part of front office internal control because it is primarily a function of the reservations department. Front office internal control focuses on activities such as tracking transaction documentation, verifying account entries and balances, and identifying vulnerabilities in the accounting system to ensure accuracy, prevent fraud, and maintain the integrity of financial transactions. Creating a guest history record, on the other hand, is more related to guest services and maintaining a record of guest preferences and past interactions for future reference.

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  • 2. 

    Which of the following represents a cash bank shortage?

    • A.

      Total of the cash checks, negotiables, and paid-outs in the cash drawer minus the initial bank is greater than the net cash receipts

    • B.

      Total of the cash checks, negotiables, and paid-outs in the cash drawer minus the initial bank is less than the net cash receipts

    • C.

      Total of the cash checks, negotiables, and paid-outs in the cash drawer minus the initial bank is equal to the net cash receipts

    • D.

      Total of the cash checks, negotiables, and paid-outs in the cash drawer is greater than the net cash receipts

    Correct Answer
    B. Total of the cash checks, negotiables, and paid-outs in the cash drawer minus the initial bank is less than the net cash receipts
    Explanation
    The correct answer is "total of the cash checks, negotiables, and paid-outs in the cash drawer minus the initial bank is less than the net cash receipts." This option indicates that there is a cash bank shortage because the total amount of cash checks, negotiables, and paid-outs in the cash drawer is lower than the net cash receipts. This means that the amount of cash received is greater than the amount of cash available in the drawer, resulting in a shortage.

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  • 3. 

    Who must conduct annual audits for publically held lodging companies?

    • A.

      The front office auditor

    • B.

      The hotel controller

    • C.

      An independent certified public accountant

    • D.

      An IRS auditor

    Correct Answer
    C. An independent certified public accountant
    Explanation
    An independent certified public accountant must conduct annual audits for publicly held lodging companies. This is because an independent CPA is an unbiased and qualified professional who can provide an objective assessment of the company's financial records and ensure compliance with accounting standards and regulations. Their expertise and independence make them the most suitable choice for conducting audits in order to maintain transparency and accountability in the financial reporting of publicly held lodging companies.

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  • 4. 

    The amount of cash, checks, and negotiables in the cashier ’s drawer, minus the initial cash bank, plus the paidouts

    • A.

      Cash bank

    • B.

      Net cash receipts

    • C.

      Overage

    • D.

      Shortage

    Correct Answer
    B. Net cash receipts
    Explanation
    The correct answer is net cash receipts. Net cash receipts refer to the total amount of cash received by the cashier, including cash from sales, payments, and other sources, after deducting any returns or refunds. It represents the actual cash inflow into the cashier's drawer, excluding any initial cash bank or paidouts.

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  • 5. 

    When the total of the cash, checks, negotiables, and paid-outs is less than net cash receipts

    • A.

      Cash bank

    • B.

      Net cash receipts

    • C.

      Overage

    • D.

      Shortage

    Correct Answer
    D. Shortage
    Explanation
    The correct answer is "shortage". This means that the total amount of cash, checks, negotiables, and paid-outs is less than the net cash receipts. In other words, the amount of money received is greater than the amount of money available, resulting in a shortage.

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  • 6. 

    When the total of the cash, checks, negotiables, and paid-outs is more than net cash receipts

    • A.

      Cash bank

    • B.

      Net cash receipts

    • C.

      Overage

    • D.

      Shortage

    Correct Answer
    C. Overage
    Explanation
    An overage occurs when the total amount of cash, checks, negotiables, and paid-outs is greater than the net cash receipts. This means that there is more money in the cash bank than what was originally expected or accounted for. It could be due to an error in recording transactions, receiving additional payments, or miscalculations.

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  • 7. 

    The amount of cash assigned to a cashier during a particular workshift

    • A.

      Cash bank

    • B.

      Net cash receipts

    • C.

      Overage

    • D.

      Shortage

    Correct Answer
    A. Cash bank
    Explanation
    The term "cash bank" refers to the amount of cash that is assigned to a cashier at the beginning of their workshift. This cash bank serves as the starting amount for the cashier's transactions throughout their shift. It represents the total amount of money that the cashier is responsible for managing and handling during their shift.

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