Control Liabilities


Andrews, Inc. paid $45,000 to buy back 9,000 shares of its $1 par value common stock. This stock was sold later at a selling price of $6 per share. The entry to record the sale includes a

A.  credit to Paid-In Capital from Treasury Stock for $9,000

B.  credit to Retained Earnings for $9,000

C.  debit to Pain-In Capital from Treasury Stock for $45,000

D.  debit to Retained Earnings for $45,000


Which of the following is a fundamental factor in having an effective, ethical corporate culture?

A.  Efficient oversight by the company’s Board of Directors

B.  Workplace ethics

C.  Code of conduct

D.  Ethics management programs


Two individuals at a retail store work the same cash register. You evaluate this situation as

A.  a violation of establishment of responsibility

B.  a violation of segregation of duties

C.  supporting the establishment of responsibility

D.  supporting internal independent verification


The Sarbanes-Oxley Act imposed which new penalty for executives?

A.  Fines

B.  Suspension

C.  Criminal prosecution for executives

D.  Return of ill-gotten gains


The Sarbanes-Oxley Act requires that all publicly traded companies maintain a system of internal controls. Internal controls can be defined as a plan to

A.  safeguard assets

B.  monitor balance sheets

C.  control liabilities

D.  evaluate capital stock

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