Question 1

Which one of the following items would be subtracted from the balance per bank statement in a bank reconciliation?

Accepted Answer

A) Outstanding checks 
B) Deposit in transit 
C) Service charges 
D) Interest on customer note 
A) Outstanding checks 
B) Deposit in transit 
C) Service charges 
D) Interest on customer note

Question 2

Pierce Corp.identified the following data in preparing a bank reconciliation on October 31, 2014.
 
What is the net amount of the adjustments to Pierce's cash balance as a result of the bank reconciliation?

Accepted Answer

A) No amounts need to be recorded 
B) $400 increase 
C) $400 decrease 
D) $900 decrease 
A) No amounts need to be recorded 
B) $400 increase 
C) $400 decrease 
D) $900 decrease

Question 3

When a bank pays interest or collects an amount owed to a company by one of the bank's customers, the bank issues a debit memorandum.

Accepted Answer

A) True 
 B)False

Question 4

If collection of accounts receivable is assured, then accounts receivable are considered to be cash equivalents.

Accepted Answer

A) True 
 B)False

Question 5

In the reconciliation of a bank statement, "deposits in transit" should be:

Accepted Answer

A) added to the unadjusted book balance 
B) subtracted from the unadjusted bank balance 
C) added to the unadjusted bank balance 
D) subtracted from the unadjusted book balance 
A) added to the unadjusted book balance 
B) subtracted from the unadjusted bank balance 
C) added to the unadjusted bank balance 
D) subtracted from the unadjusted book balance

Question 6

An) is a form sent by the purchasing department to the supplier.

Accepted Answer

The answer of An) is a form sent by the...

Question 7

The following set of items describes activities completed by a company in collecting cash for merchandise sales.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.
An employee from the accounting department compares the control list and the cash register tapes with the bank deposit slip.

Accepted Answer

A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control 
A) Adheres to sound internal control procedures 
B) Violates sound internal control procedures 
C) Neither strengthens nor violates internal control

Question 8

Which of the following is an example of a debit memorandum?

Accepted Answer

A) Service charge notice 
B) Interest earned on the account balance 
C) Outstanding check 
D) Company error in recording a $500 deposit as $600 
A) Service charge notice 
B) Interest earned on the account balance 
C) Outstanding check 
D) Company error in recording a $500 deposit as $600

Question 9

If a company hires honest employees, no internal control procedures are necessary.

Accepted Answer

A) True 
 B)False

Question 10

Administrative controls

Accepted Answer

A) are concerned with efficient operations and adherence to managerial policies. 
B) are concerned with the reliability of the financial statements. 
C) are the responsibility of the company's auditors. 
D) are concerned primarily with safeguarding assets. 
A) are concerned with efficient operations and adherence to managerial policies. 
B) are concerned with the reliability of the financial statements. 
C) are the responsibility of the company's auditors. 
D) are concerned primarily with safeguarding assets.

Question 11

Which one of the following statements is true?

Accepted Answer

A) Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account. 
B) Sound internal control practice dictates that disbursements should be made by check. 
C) The person handling the cash should also prepare the bank reconciliation. 
D) Petty cash can be substituted for a checking account to expedite the payment of all disbursements. 
A) Good cash management practices dictate that a company should maintain as large a balance as possible in its cash account. 
B) Sound internal control practice dictates that disbursements should be made by check. 
C) The person handling the cash should also prepare the bank reconciliation. 
D) Petty cash can be substituted for a checking account to expedite the payment of all disbursements.

Question 12

The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Accepted Answer

The answer of The is a subset of the board...

Question 13

Gentech Corp.prepared a bank reconciliation as of June 30, 2014.The following items were identified:
 
Gentech's adjusted cash balance at June 30, 2014 is

Accepted Answer

A) $13,800 
B) $14,100 
C) $14,000 
D) $14,300 
A) $13,800 
B) $14,100 
C) $14,000 
D) $14,300

Question 14

Treasury notes with a maturity of three months or less that are issued by the Federal Government are cash equivalents.

Accepted Answer

A) True 
 B)False

Question 15

The only reason a company needs to create an internal control system is to deter intentional fraudulent acts.

Accepted Answer

A) True 
 B)False

Question 16

A six-month certificate of deposit would be considered to be a cash equivalent.

Accepted Answer

A) True 
 B)False

Question 17

Effective cash management and control includes all of the following except

Accepted Answer

A) The use of a petty cash fund 
B) Bank reconciliations 
C) Short-term investments of excess cash 
D) Purchase of stocks and bonds 
A) The use of a petty cash fund 
B) Bank reconciliations 
C) Short-term investments of excess cash 
D) Purchase of stocks and bonds

Question 18

Some cash equivalents appear in the long term investment section of a balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Checks returned by a bank because customers did not have sufficient funds in their account are called

Accepted Answer

A) Canceled checks 
B) Certified checks 
C) NSF checks 
D) Outstanding checks 
A) Canceled checks 
B) Certified checks 
C) NSF checks 
D) Outstanding checks

Question 20

How would outstanding checks be dealt with in a bank reconciliation?

Accepted Answer

A) added to company's book balance 
B) deducted from company's book balance 
C) added to bank statement balance 
D) deducted from bank statement balance 
A) added to company's book balance 
B) deducted from company's book balance 
C) added to bank statement balance 
D) deducted from bank statement balance

Which one of the following items would be subtracted from the balance per bank statement in a bank reconciliation?

Pierce Corp.identified the following data in preparing a bank reconciliation on October 31, 2014. What is the net amount of the adjustments to Pierce's cash balance as a result of the bank reconciliation?

When a bank pays interest or collects an amount owed to a company by one of the bank's customers, the bank issues a debit memorandum.

If collection of accounts receivable is assured, then accounts receivable are considered to be cash equivalents.

In the reconciliation of a bank statement, "deposits in transit" should be:

An) is a form sent by the purchasing department to the supplier.

Which of the following is an example of a debit memorandum?

If a company hires honest employees, no internal control procedures are necessary.

Administrative controls

Which one of the following statements is true?

The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Gentech Corp.prepared a bank reconciliation as of June 30, 2014.The following items were identified: Gentech's adjusted cash balance at June 30, 2014 is

Treasury notes with a maturity of three months or less that are issued by the Federal Government are cash equivalents.

The only reason a company needs to create an internal control system is to deter intentional fraudulent acts.

A six-month certificate of deposit would be considered to be a cash equivalent.

Effective cash management and control includes all of the following except

Some cash equivalents appear in the long term investment section of a balance sheet.

Checks returned by a bank because customers did not have sufficient funds in their account are called

How would outstanding checks be dealt with in a bank reconciliation?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 6: Cash and Internal Control

Which one of the following items would be subtracted from the balance per bank statement in a bank reconciliation?

Pierce Corp.identified the following data in preparing a bank reconciliation on October 31, 2014. What is the net amount of the adjustments to Pierce's cash balance as a result of the bank reconciliation?

When a bank pays interest or collects an amount owed to a company by one of the bank's customers, the bank issues a debit memorandum.

If collection of accounts receivable is assured, then accounts receivable are considered to be cash equivalents.

In the reconciliation of a bank statement, "deposits in transit" should be:

An) is a form sent by the purchasing department to the supplier.

Which of the following is an example of a debit memorandum?

If a company hires honest employees, no internal control procedures are necessary.

Administrative controls

Which one of the following statements is true?

The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Gentech Corp.prepared a bank reconciliation as of June 30, 2014.The following items were identified: Gentech's adjusted cash balance at June 30, 2014 is

Treasury notes with a maturity of three months or less that are issued by the Federal Government are cash equivalents.

The only reason a company needs to create an internal control system is to deter intentional fraudulent acts.

A six-month certificate of deposit would be considered to be a cash equivalent.

Effective cash management and control includes all of the following except

Some cash equivalents appear in the long term investment section of a balance sheet.

Checks returned by a bank because customers did not have sufficient funds in their account are called

How would outstanding checks be dealt with in a bank reconciliation?

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters