Question 1

List the principles of internal control.

Accepted Answer

Principles of internal control include e

Question 2

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information:   The adjusted cash balance per the books on April 30 is:

Accepted Answer

A) $6,900 
B) $8,160 
C) $4,600 
D) $6,520 
E) $5,840 
A) $6,900 
B) $8,160 
C) $4,600 
D) $6,520 
E) $5,840

Question 3

Norman Co.had $5,925 million in sales and $1,155 million in ending accounts receivable for the current period.For the same period,Opal Co.reported $5,885 million in sales and $790 million in ending accounts receivable.Calculate the days' sales uncollected for both companies as of the end of the current period and indicate which company is doing a better job in managing the collection of its receivables.

Accepted Answer

Days' Sales Uncollected Ratio = Ending A

Question 4

Vouchers should be used for purchases of inventory and all other expenditures made within a company.

Accepted Answer

A) True 
 B)False

Question 5

Cash equivalents:

Accepted Answer

A) Are short-term,highly liquid investment assets. 
B) Include 6-month certificates of deposit. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders. 
A) Are short-term,highly liquid investment assets. 
B) Include 6-month certificates of deposit. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders.

Question 6

Approved vouchers are recorded in a journal called the voucher register.

Accepted Answer

A) True 
 B)False

Question 7

The checklist of steps necessary for approving an invoice for recording and payment,also known as the check authorization,is the:

Accepted Answer

A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval. 
A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval.

Question 8

A set of procedures and approvals for verifying,approving,and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n):

Accepted Answer

A) Internal cash system. 
B) Petty cash system. 
C) Cash disbursement system. 
D) Voucher system. 
E) Cash control system. 
A) Internal cash system. 
B) Petty cash system. 
C) Cash disbursement system. 
D) Voucher system. 
E) Cash control system.

Question 9

The three parties involved with a check are:

Accepted Answer

A) The writer,the cashier,and the bank. 
B) The maker,the payee,and the bank. 
C) The maker,the manager,and the payee. 
D) The bookkeeper,the payee,and the bank. 
E) The signer,the cashier,and the company. 
A) The writer,the cashier,and the bank. 
B) The maker,the payee,and the bank. 
C) The maker,the manager,and the payee. 
D) The bookkeeper,the payee,and the bank. 
E) The signer,the cashier,and the company.

Question 10

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Accepted Answer

A) All withdrawals through an ATM. 
B) A fee assessed to the depositor's account. 
C) An uncollectible check. 
D) Periodic payments arranged in advance,by a depositor. 
E) A deposit to their account. 
A) All withdrawals through an ATM. 
B) A fee assessed to the depositor's account. 
C) An uncollectible check. 
D) Periodic payments arranged in advance,by a depositor. 
E) A deposit to their account.

Question 11

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and are close enough to their due date so that their market value will not greatly change.

Accepted Answer

A) True 
 B)False

Question 12

Describe a bank reconciliation and discuss its purpose.

Accepted Answer

A bank reconciliation is a report explai

Question 13

On a bank statement,deposits are listed as credits because the bank increases its liability to the depositor when the deposit is made.

Accepted Answer

A) True 
 B)False

Question 14

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

Accepted Answer

A) Subtract $45 from the bank's balance. 
B) Add $45 to the bank's balance. 
C) Subtract $45 from the book balance. 
D) Add $45 to the book balance. 
E) Subtract $45 from the bank's balance and add $45 to the book's balance. 
A) Subtract $45 from the bank's balance. 
B) Add $45 to the bank's balance. 
C) Subtract $45 from the book balance. 
D) Add $45 to the book balance. 
E) Subtract $45 from the bank's balance and add $45 to the book's balance.

Question 15

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Accepted Answer

A) True 
 B)False

Question 16

Pelcher Co.maintains a $400 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $110 for office supplies,$140 for merchandise inventory,and $70 for miscellaneous expenses.There is a cash overage of $4.Based on this information,the amount of cash in the fund before the replenishment is:

Accepted Answer

A) $400. 
B) $320. 
C) $80. 
D) $76. 
E) $84. 
A) $400. 
B) $320. 
C) $80. 
D) $76. 
E) $84.

Question 17

Easton Co.deposits all cash receipts on the day they are received and makes all cash payments by check.At the close of business on June 30,its Cash account shows a debit balance of $60,209.Easton's June bank statement shows $58,349 on deposit in the bank.Determine the adjusted cash balance using the following information:   The adjusted cash balance should be:

Accepted Answer

A) $60,194 
B) $60,239 
C) $62,149 
D) $56,424 
E) $60,224 
A) $60,194 
B) $60,239 
C) $62,149 
D) $56,424 
E) $60,224

Question 18

Havermill Co.establishes a $250 petty cash fund on September 1.On September 30,the fund is replenished.The accumulated receipts on that date represent $73 for Office Supplies,$137 for merchandise inventory,and $22 for miscellaneous expenses.The fund has a balance of $18.On October 1,the accountant determines that the fund should be increased by $50.The journal entry to record the establishment of the fund on September 1 is:

Accepted Answer

A) Debit Cash $250; credit Petty Cash $250. 
B) Debit Petty Cash $250; credit Accounts Payable $250. 
C) Debit Miscellaneous Expense $250; credit Cash $250. 
D) Debit Petty Cash $250; credit Cash $250. 
E) Debit Cash $250; credit Accounts Payable $250. 
A) Debit Cash $250; credit Petty Cash $250. 
B) Debit Petty Cash $250; credit Accounts Payable $250. 
C) Debit Miscellaneous Expense $250; credit Cash $250. 
D) Debit Petty Cash $250; credit Cash $250. 
E) Debit Cash $250; credit Accounts Payable $250.

Question 19

Basic bank services do not include:

Accepted Answer

A) Bank accounts. 
B) Bank deposits. 
C) Checking. 
D) Electronic funds transfer. 
E) Petty cash management. 
A) Bank accounts. 
B) Bank deposits. 
C) Checking. 
D) Electronic funds transfer. 
E) Petty cash management.

Question 20

Electronic funds transfers (EFTs)are decreasingly used by companies due to the inconvenience and high cost.

Accepted Answer

A) True 
 B)False

List the principles of internal control.

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Vouchers should be used for purchases of inventory and all other expenditures made within a company.

Cash equivalents:

Approved vouchers are recorded in a journal called the voucher register.

The checklist of steps necessary for approving an invoice for recording and payment,also known as the check authorization,is the:

A set of procedures and approvals for verifying,approving,and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n):

The three parties involved with a check are:

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and are close enough to their due date so that their market value will not greatly change.

Describe a bank reconciliation and discuss its purpose.

On a bank statement,deposits are listed as credits because the bank increases its liability to the depositor when the deposit is made.

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Basic bank services do not include:

Electronic funds transfers (EFTs)are decreasingly used by companies due to the inconvenience and high cost.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 6: Reporting and Analyzing Cash,fraud,and Internal Control

List the principles of internal control.

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Vouchers should be used for purchases of inventory and all other expenditures made within a company.

Cash equivalents:

Approved vouchers are recorded in a journal called the voucher register.

The checklist of steps necessary for approving an invoice for recording and payment,also known as the check authorization,is the:

A set of procedures and approvals for verifying,approving,and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n):

The three parties involved with a check are:

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and are close enough to their due date so that their market value will not greatly change.

Describe a bank reconciliation and discuss its purpose.

On a bank statement,deposits are listed as credits because the bank increases its liability to the depositor when the deposit is made.

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Basic bank services do not include:

Electronic funds transfers (EFTs)are decreasingly used by companies due to the inconvenience and high cost.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters