Question 1

The treasurer should prepare and sign a check only after authorization to issue a check has been provided.

Accepted Answer

A) True 
 B)False

Question 2

For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation?

Accepted Answer

A) Check for $63 recorded by the company as $36. 
B) Deposit of $600 recorded by the bank as $60. 
C) A returned $300 check recorded by the bank as $30. 
D) Check for $75 recorded by the company as $57. 
A) Check for $63 recorded by the company as $36. 
B) Deposit of $600 recorded by the bank as $60. 
C) A returned $300 check recorded by the bank as $30. 
D) Check for $75 recorded by the company as $57.

Question 3

A $300 petty cash fund has cash of $55 and receipts of $240.The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for $240. 
B) credit to Petty Cash for $245. 
C) debit to Cash Over and Short for $5. 
D) credit to Cash for $240. 
A) debit to Cash for $240. 
B) credit to Petty Cash for $245. 
C) debit to Cash Over and Short for $5. 
D) credit to Cash for $240.

Question 4

Which of the following is 
not included in the cash disbursements section of a cash budget?

Accepted Answer

A) Payments to suppliers for inventory. 
B) Payments to employees for salaries. 
C) Payments for operating expenses, including depreciation. 
D) All of these answer choices are included. 
A) Payments to suppliers for inventory. 
B) Payments to employees for salaries. 
C) Payments for operating expenses, including depreciation. 
D) All of these answer choices are included.

Question 5

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

Accepted Answer

A) a violation of establishment of responsibility. 
B) a violation of separation of duties. 
C) supporting the establishment of responsibility. 
D) supporting internal independent verification. 
A) a violation of establishment of responsibility. 
B) a violation of separation of duties. 
C) supporting the establishment of responsibility. 
D) supporting internal independent verification.

Question 6

Electronic funds transfer (EFT) is a disbursement system that transfers cash from one location to another using

Accepted Answer

A) a telephone only. 
B) a telegraph only. 
C) a computer only. 
D) a telephone, telegraph, or computer. 
A) a telephone only. 
B) a telegraph only. 
C) a computer only. 
D) a telephone, telegraph, or computer.

Question 7

At April 30, Kessler Company has the following bank information:   What is Kessler's adjusted cash balance on April 30?

Accepted Answer

A) $7,290. 
B) $7,320. 
C) $6,495. 
D) $7,305. 
A) $7,290. 
B) $7,320. 
C) $6,495. 
D) $7,305.

Question 8

Control over cash disbursements is generally more effective when

Accepted Answer

A) all bills are paid in cash. 
B) disbursements are made by the accounts payable subsidiary clerk. 
C) payments are made by check. 
D) all purchases are made on credit. 
A) all bills are paid in cash. 
B) disbursements are made by the accounts payable subsidiary clerk. 
C) payments are made by check. 
D) all purchases are made on credit.

Question 9

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not an internal control activity for cash?

Accepted Answer

A) All payments should be made with currency, not checks. 
B) Banking facilities should be used as much as possible. 
C) The amount of cash on hand should be kept to a minimum. 
D) Employees who have access to cash should be bonded. 
A) All payments should be made with currency, not checks. 
B) Banking facilities should be used as much as possible. 
C) The amount of cash on hand should be kept to a minimum. 
D) Employees who have access to cash should be bonded.

Question 11

The entry to replenish a petty cash fund includes a credit to

Accepted Answer

A) Petty Cash. 
B) Cash. 
C) Freight-In. 
D) Postage Expense. 
A) Petty Cash. 
B) Cash. 
C) Freight-In. 
D) Postage Expense.

Question 12

Each of the following is a feature of internal control except

Accepted Answer

A) an extensive marketing plan. 
B) bonding of employees. 
C) separation of duties. 
D) recording of all transactions. 
A) an extensive marketing plan. 
B) bonding of employees. 
C) separation of duties. 
D) recording of all transactions.

Question 13

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

Accepted Answer

A) True 
 B)False

Question 14

A petty cash fund is used to pay relatively large amounts.

Accepted Answer

A) True 
 B)False

Question 15

An exception to disbursements being made by check is acceptable when cash is paid

Accepted Answer

A) to an owner. 
B) to employees as wages. 
C) from petty cash. 
D) to employees as loans. 
A) to an owner. 
B) to employees as wages. 
C) from petty cash. 
D) to employees as loans.

Question 16

Bank errors

Accepted Answer

A) occur because of time lags. 
B) must be corrected by debits. 
C) are infrequent in occurrence. 
D) are corrected by making an adjusting entry on the depositor's books. 
A) occur because of time lags. 
B) must be corrected by debits. 
C) are infrequent in occurrence. 
D) are corrected by making an adjusting entry on the depositor's books.

Question 17

In the month of May, Lopat Company Inc.wrote checks in the amount of $74,000.In June, checks in the amount of $101,264 were written.In May, $67,744 of these checks were presented to the bank for payment and $87,064 in June.What is the amount of outstanding checks at the end of May?

Accepted Answer

A) $14,200. 
B) $6,256. 
C) $20,456. 
D) $28,400. 
A) $14,200. 
B) $6,256. 
C) $20,456. 
D) $28,400.

Question 18

A system of internal control cannot be considered good until the possibility of human error has been completely eliminated.

Accepted Answer

A) True 
 B)False

Question 19

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

Accepted Answer

A) True 
 B)False

Question 20

A credit balance in Cash Over and Short account is shown as

Accepted Answer

A) an asset. 
B) a liability. 
C) a revenue. 
D) an expense. 
A) an asset. 
B) a liability. 
C) a revenue. 
D) an expense.

The treasurer should prepare and sign a check only after authorization to issue a check has been provided.

For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation?

A $300 petty cash fund has cash of $55 and receipts of $240.The journal entry to replenish the account would include a

Which of the following is not included in the cash disbursements section of a cash budget?

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

Electronic funds transfer (EFT) is a disbursement system that transfers cash from one location to another using

At April 30, Kessler Company has the following bank information: What is Kessler's adjusted cash balance on April 30?

Control over cash disbursements is generally more effective when

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Which of the following is not an internal control activity for cash?

The entry to replenish a petty cash fund includes a credit to

Each of the following is a feature of internal control except

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

A petty cash fund is used to pay relatively large amounts.

An exception to disbursements being made by check is acceptable when cash is paid

Bank errors

In the month of May, Lopat Company Inc.wrote checks in the amount of $74,000.In June, checks in the amount of $101,264 were written.In May, $67,744 of these checks were presented to the bank for payment and $87,064 in June.What is the amount of outstanding checks at the end of May?

A system of internal control cannot be considered good until the possibility of human error has been completely eliminated.

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

A credit balance in Cash Over and Short account is shown as

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 7: Fraud, Internal Control, and Cash

The treasurer should prepare and sign a check only after authorization to issue a check has been provided.

For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation?

A $300 petty cash fund has cash of $55 and receipts of $240.The journal entry to replenish the account would include a

Which of the following is not included in the cash disbursements section of a cash budget?

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

Electronic funds transfer (EFT) is a disbursement system that transfers cash from one location to another using

At April 30, Kessler Company has the following bank information: What is Kessler's adjusted cash balance on April 30?

Control over cash disbursements is generally more effective when

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Which of the following is not an internal control activity for cash?

The entry to replenish a petty cash fund includes a credit to

Each of the following is a feature of internal control except

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

A petty cash fund is used to pay relatively large amounts.

An exception to disbursements being made by check is acceptable when cash is paid

Bank errors

In the month of May, Lopat Company Inc.wrote checks in the amount of $74,000.In June, checks in the amount of $101,264 were written.In May, $67,744 of these checks were presented to the bank for payment and $87,064 in June.What is the amount of outstanding checks at the end of May?

A system of internal control cannot be considered good until the possibility of human error has been completely eliminated.

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

A credit balance in Cash Over and Short account is shown as

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters