Question 1

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

Accepted Answer

A) True 
 B)False

Question 2

All of the following are examples of a control activity except

Accepted Answer

A) using prenumbered documents. 
B) reconciling the bank statement. 
C) insistence that employees work overtime. 
D) prenumbering cheques. 
A) using prenumbered documents. 
B) reconciling the bank statement. 
C) insistence that employees work overtime. 
D) prenumbering cheques.

Question 3

Which one of the following would not cause a bank to debit a depositor's account?

Accepted Answer

A) bank service charge 
B) collection of a note receivable 
C) payment of a note payable 
D) cheques marked NSF 
A) bank service charge 
B) collection of a note receivable 
C) payment of a note payable 
D) cheques marked NSF

Question 4

Management only needs to know how much cash is available at the end of the month (when the bank reconciliation is prepared).

Accepted Answer

A) True 
 B)False

Question 5

Internal controls can be detective controls that

Accepted Answer

A) stop something management does not want to happen from occurring. 
B) identify fraudulent activities that have already occurred. 
C) do not quantify fraudulent activities. 
D) indicate when something that management wanted to happen occurred. 
A) stop something management does not want to happen from occurring. 
B) identify fraudulent activities that have already occurred. 
C) do not quantify fraudulent activities. 
D) indicate when something that management wanted to happen occurred.

Question 6

On a bank reconciliation, which of the following would be deducted from the balance per books?

Accepted Answer

A) outstanding cheques 
B) deposits in transit 
C) electronic payment by a customer on account 
D) bank service charges 
A) outstanding cheques 
B) deposits in transit 
C) electronic payment by a customer on account 
D) bank service charges

Question 7

The control activity related to not having the same person authorize and pay for goods is known as

Accepted Answer

A) physical controls. 
B) review and reconciliation. 
C) segregation of duties. 
D) assignment of responsibility. 
A) physical controls. 
B) review and reconciliation. 
C) segregation of duties. 
D) assignment of responsibility.

Question 8

Which of the following is not a good control activity over cash?

Accepted Answer

A) Payments to creditors should be made in cash. 
B) There should be limited access to cash. 
C) The amount of cash on hand should be kept at a minimum. 
D) Cash should be deposited daily. 
A) Payments to creditors should be made in cash. 
B) There should be limited access to cash. 
C) The amount of cash on hand should be kept at a minimum. 
D) Cash should be deposited daily.

Question 9

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Accepted Answer

A) True 
 B)False

Question 10

On the April 30 bank reconciliation, a deposit made by a company to its bank account on April 18 will likely appear as a(n)

Accepted Answer

A) addition to the balance per books. 
B) deduction from the balance per books. 
C) deduction from the balance per bank. 
D) This will not affect the current period's bank reconciliation. 
A) addition to the balance per books. 
B) deduction from the balance per books. 
C) deduction from the balance per bank. 
D) This will not affect the current period's bank reconciliation.

Question 11

Which of the following statements is false?

Accepted Answer

A) A basic principle of cash management is to increase the speed of paying liabilities. 
B) A company should plan the timing of major expenditures in light of its operating cycle. 
C) A cash budget will help determine if additional financing will be necessary. 
D) A key principle of cash management is to increase the speed of collection on receivables. 
A) A basic principle of cash management is to increase the speed of paying liabilities. 
B) A company should plan the timing of major expenditures in light of its operating cycle. 
C) A cash budget will help determine if additional financing will be necessary. 
D) A key principle of cash management is to increase the speed of collection on receivables.

Question 12

All of the following are examples of a control activity except

Accepted Answer

A) an extensive marketing plan. 
B) assignment of responsibility. 
C) segregation of duties. 
D) insurance on assets. 
A) an extensive marketing plan. 
B) assignment of responsibility. 
C) segregation of duties. 
D) insurance on assets.

Question 13

The use of electronic funds transfers normally results in better control over cash.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true?

Accepted Answer

A) A good system of internal control does not require monitoring. 
B) Risk assessment is one component of a good system of internal control. 
C) When one individual is responsible for all related activities, the potential for errors and irregularities is decreased. 
D) Control activities are most effective when several people are responsible for a given task. 
A) A good system of internal control does not require monitoring. 
B) Risk assessment is one component of a good system of internal control. 
C) When one individual is responsible for all related activities, the potential for errors and irregularities is decreased. 
D) Control activities are most effective when several people are responsible for a given task.

Question 15

Arthur is warehouse custodian and also maintains the accounting records of the inventory held at the warehouse.Which control activity is violated?

Accepted Answer

A) documentation 
B) review and reconciliation 
C) segregation of duties 
D) assignment of responsibility 
A) documentation 
B) review and reconciliation 
C) segregation of duties 
D) assignment of responsibility

Question 16

On Andrew Corp.'s April bank reconciliation, cheques outstanding totalled $9,620.In May, the corporation issued cheques totalling $26,800.The May bank statement shows that $24,250 in cheques cleared the bank in May.A cheque from one of Andrew Corp.'s customers in the amount of $325 was also returned marked "NSF." The amount of outstanding cheques on Andrew's May bank reconciliation should be

Accepted Answer

A) $2,550. 
B) $11,845. 
C) $12,495. 
D) $12,170. 
A) $2,550. 
B) $11,845. 
C) $12,495. 
D) $12,170.

Question 17

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

Accepted Answer

A) True 
 B)False

Question 18

Cash equivalents are

Accepted Answer

A) often combined with cash and reported as a current asset. 
B) reported as a non-current asset. 
C) reported as a current liability. 
D) reported as a part of bank indebtedness. 
A) often combined with cash and reported as a current asset. 
B) reported as a non-current asset. 
C) reported as a current liability. 
D) reported as a part of bank indebtedness.

Question 19

Which of the following is considered to be Cash?

Accepted Answer

A) returned cheques 
B) cheques 
C) postdated cheques 
D) stale-dated cheques 
A) returned cheques 
B) cheques 
C) postdated cheques 
D) stale-dated cheques

Question 20

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled cheques.

Accepted Answer

A) True 
 B)False

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

All of the following are examples of a control activity except

Which one of the following would not cause a bank to debit a depositor's account?

Management only needs to know how much cash is available at the end of the month (when the bank reconciliation is prepared).

Internal controls can be detective controls that

On a bank reconciliation, which of the following would be deducted from the balance per books?

The control activity related to not having the same person authorize and pay for goods is known as

Which of the following is not a good control activity over cash?

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

On the April 30 bank reconciliation, a deposit made by a company to its bank account on April 18 will likely appear as a(n)

Which of the following statements is false?

All of the following are examples of a control activity except

The use of electronic funds transfers normally results in better control over cash.

Which of the following statements is true?

Arthur is warehouse custodian and also maintains the accounting records of the inventory held at the warehouse.Which control activity is violated?

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

Cash equivalents are

Which of the following is considered to be Cash?

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled cheques.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 7: Internal Control and Cash

When the cash account has a credit balance in the general ledger, it is reported as a non-current liability.

All of the following are examples of a control activity except

Which one of the following would not cause a bank to debit a depositor's account?

Management only needs to know how much cash is available at the end of the month (when the bank reconciliation is prepared).

Internal controls can be detective controls that

On a bank reconciliation, which of the following would be deducted from the balance per books?

The control activity related to not having the same person authorize and pay for goods is known as

Which of the following is not a good control activity over cash?

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

On the April 30 bank reconciliation, a deposit made by a company to its bank account on April 18 will likely appear as a(n)

Which of the following statements is false?

All of the following are examples of a control activity except

The use of electronic funds transfers normally results in better control over cash.

Which of the following statements is true?

Arthur is warehouse custodian and also maintains the accounting records of the inventory held at the warehouse.Which control activity is violated?

To obtain maximum benefit from a bank reconciliation, the reconciliation should be prepared by the person authorized to sign cheques.

Cash equivalents are

Which of the following is considered to be Cash?

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled cheques.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters