Question 1

It is necessary for the owners and top managers to demonstrate the importance of internal controls in order to expect the employees to take the controls seriously.

Accepted Answer

A) True 
 B)False

Question 2

Explain the characteristics and internal control features of an imprest fund.

Accepted Answer

An imprest fund is money set aside for a

Question 3

The initial entry to establish a petty cash fund involves a debit to cash and a credit to petty cash.

Accepted Answer

A) True 
 B)False

Question 4

Classify each of the following reconciling items of the Tic and Tac Company as:

-Collection of note receivable plus interest revenue by bank ________

Accepted Answer

A) an addition to the bank balance 
B) a deduction from the bank balance 
C) an addition to the book balance 
D) a deduction from the book balance 
E) not a reconciling item 
A) an addition to the bank balance 
B) a deduction from the bank balance 
C) an addition to the book balance 
D) a deduction from the book balance 
E) not a reconciling item

Question 5

When sales revenue exceeds cash receipts, the difference is:

Accepted Answer

A) debited to Cash Short and Over. 
B) credited to Cash Short and Over. 
C) debited to Cost of Goods Sold. 
D) credited to Cost of Goods Sold. 
A) debited to Cash Short and Over. 
B) credited to Cash Short and Over. 
C) debited to Cost of Goods Sold. 
D) credited to Cost of Goods Sold.

Question 6

The following information is available for Blue Moon Company regarding its June 30, 2019, bank statement:
- Balance per bank statement is $10,300.34.
- Balance per books is $9,652.78. Cheque #506 for $1,948.52 and cheque #510 for $1,600.25 were not returned with the June 30 bank statement.
- A deposit in transit of $4,562.21 had not been received by the bank when the bank statement was generated.
- A bank debit memo indicated an NSF cheque written by Bruce Garrett to Blue Moon Company on June 13 for $279.
- A bank credit memo indicated a bank collection of $1,900 and interest revenue of $75 on June 20.
- The bank statement indicated service charges of $35.
Prepare a bank reconciliation for Blue Moon Company dated June 30, 2019

Accepted Answer

The answer of The following information is available for Blue...

Question 7

Which of the following items are both reconciling items on the book side of the reconciliation?

Accepted Answer

A) outstanding cheques and correction of book error 
B) deposit in transit and NSF cheque 
C) bank service charge and outstanding cheques 
D) bank service charge and correction of book error 
A) outstanding cheques and correction of book error 
B) deposit in transit and NSF cheque 
C) bank service charge and outstanding cheques 
D) bank service charge and correction of book error

Question 8

The evaluated receipts settlement procedure streamlines payment processing by eliminating the need for a receiving report.

Accepted Answer

A) True 
 B)False

Question 9

The sole purpose of systems of internal control is to detect fraud.

Accepted Answer

A) True 
 B)False

Question 10

A ________ limits access to a local network.

Accepted Answer

A) computer-virus device 
B) marker 
C) firewall 
D) point-of-sale terminal 
A) computer-virus device 
B) marker 
C) firewall 
D) point-of-sale terminal

Question 11

Table 8-1
The petty cash fund had the following petty cash ticket: $$\begin{array} { l r } 
\text { Toner for a printer } & \$ 42 \
\text { Freight to deliver goods sold } & 39 \
\text { Freight on inventory purchased. } & 112 \
\text { Miscellaneous expense } & 10 \
\text { Postage expense } & \underline { 25 } \
& \underline{\$ 228} \
\end{array}$$
-Refer to Table 8-1. Assume that the business has established a petty cash fund in the amount of $250 and that the amount of cash in the fund at the time of replenishment is $24. The business uses a perpetual inventory system.
Prepare the entry to replenish the fund on February 28.

Accepted Answer

The answer of Table 8-1
The petty cash fund had the...

Question 12

All of the following are items that cause a difference between the bank balance and the book balance except:

Accepted Answer

A) cancelled cheques. 
B) deposits in transit. 
C) outstanding cheques. 
D) NSF cheques. 
A) cancelled cheques. 
B) deposits in transit. 
C) outstanding cheques. 
D) NSF cheques.

Question 13

The following data are available for Remas Designs for October: $$\begin{array} { | l | r | } 
\hline \text { Book balance, October } 31 & \$ 5,600 \
\hline \text { Outstanding cheques } & 584 \
\hline \text { Deposits in transit } & 2,500 \
\hline \text { Service charges } & 75 \
\hline \text { Interest revenue } & 25 \
\hline
\end{array}$$ What is the adjusted book balance on October 31 for Remas Designs based on the above data?

Accepted Answer

A) $5,500 
B) $5,550 
C) $7,466 
D) $4,966 
A) $5,500 
B) $5,550 
C) $7,466 
D) $4,966

Question 14

If the bank mistakenly recorded a $29 payment as $92, the error would be shown on the bank reconciliation as a:

Accepted Answer

A) $63 addition to the bank balance. 
B) $92 deduction from the bank balance. 
C) $92 addition to the bank balance. 
D) $63 deduction from the bank balance. 
A) $63 addition to the bank balance. 
B) $92 deduction from the bank balance. 
C) $92 addition to the bank balance. 
D) $63 deduction from the bank balance.

Question 15

Johnston Construction created a petty cash fund on July 1, 2019 with an imprest balance of $400. During July, Sandy Bellamy, the fund custodian, signed the following petty cash tickets: $$\begin{array} { l l r } 
\text { Ticket \#Item } & \text { Amount } \
1 \quad\quad \text { Office supplies } & \$ 29.42 \
2 \quad\quad \text { Postage } & 19.00 \
3 \quad\quad \text { Courier charges } & 72.00 \
4 \quad\quad \text { Entertainment lunches } & 147.33 \
5 \quad\quad \text { Office supplies } & 123.24
\end{array}$$ On July 31, prior to the replenishment, the fund contained these tickets plus $8.01.
Required:
Prepare journal entries to create the fund, replenish the fund, and increase the fund to $450.
General Journal
 $$\begin{array} { | l | l | l | l | } 
\hline \text { Date } & \text { Accounts } & \text { Debit } & \text { Credit } \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Johnston Construction created a petty cash fund...

Question 16

In each of the following situations, identify the internal control weakness as well as the business's potential problem, and suggest a solution.
a)The law firm of Douglas and Gere has been extremely busy in recent months. It needs another lawyer, but has not had the chance to hire one. In the meantime, one of the secretaries has been preparing briefs, writing up wills, and preparing the closing papers for various real estate deals.
b)Tobey Smith, an accounting clerk, is responsible for opening the mail, recording and depositing cash receipts, as well as preparing the monthly bank reconciliation. Tobey has not taken a vacation in over five years.
c)Carole Tobias purchases supplies for Darcey Company and stores them in a locked room for which she has the key. She is also responsible for distributing these supplies to employees upon request. At the end of each month, Carole takes an inventory of the supplies on hand and notifies the accounting department of the amount of the adjusting entry for supplies used.

Accepted Answer

a)The internal control weakness here is

Question 17

The controller is responsible for cash management in an organization.

Accepted Answer

A) True 
 B)False

Question 18

If the bank mistakenly recorded a $17 deposit as $71, the error would be shown on the bank reconciliation as a:

Accepted Answer

A) $71 addition to the bank balance. 
B) $54 addition to the bank balance. 
C) $71 deduction from the bank balance. 
D) $54 deduction from the bank balance. 
A) $71 addition to the bank balance. 
B) $54 addition to the bank balance. 
C) $71 deduction from the bank balance. 
D) $54 deduction from the bank balance.

Question 19

Classify each of the following reconciling items of the Tic and Tac Company as:

-Bank added deposit to Tic and Tac's account in error ________

Accepted Answer

A) an addition to the bank balance 
B) a deduction from the bank balance 
C) an addition to the book balance 
D) a deduction from the book balance 
E) not a reconciling item 
A) an addition to the bank balance 
B) a deduction from the bank balance 
C) an addition to the book balance 
D) a deduction from the book balance 
E) not a reconciling item

Question 20

If a cash register is short by $19, and the cash register tape totalled $1,550, then:

Accepted Answer

A) Sales Revenue is credited for $1,569. 
B) Sales Revenue is credited for $1,531. 
C) Cash Short and Over is credited for $19. 
D) Cash Short and Over is debited for $19. 
A) Sales Revenue is credited for $1,569. 
B) Sales Revenue is credited for $1,531. 
C) Cash Short and Over is credited for $19. 
D) Cash Short and Over is debited for $19.

It is necessary for the owners and top managers to demonstrate the importance of internal controls in order to expect the employees to take the controls seriously.

Explain the characteristics and internal control features of an imprest fund.

The initial entry to establish a petty cash fund involves a debit to cash and a credit to petty cash.

Classify each of the following reconciling items of the Tic and Tac Company as: -Collection of note receivable plus interest revenue by bank ________

When sales revenue exceeds cash receipts, the difference is:

Which of the following items are both reconciling items on the book side of the reconciliation?

The evaluated receipts settlement procedure streamlines payment processing by eliminating the need for a receiving report.

The sole purpose of systems of internal control is to detect fraud.

A ________ limits access to a local network.

All of the following are items that cause a difference between the bank balance and the book balance except:

The following data are available for Remas Designs for October: Book balance, October 31 \ 5,600 Outstanding cheques 584 Deposits in transit 2,500 Service charges 75 Interest revenue 25 What is the adjusted book balance on October 31 for Remas Designs based on the above data?

If the bank mistakenly recorded a $29 payment as $92, the error would be shown on the bank reconciliation as a:

The controller is responsible for cash management in an organization.

If the bank mistakenly recorded a $17 deposit as $71, the error would be shown on the bank reconciliation as a:

Classify each of the following reconciling items of the Tic and Tac Company as: -Bank added deposit to Tic and Tac's account in error ________

If a cash register is short by $19, and the cash register tape totalled $1,550, then:

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 8: Internal Control and Cash

It is necessary for the owners and top managers to demonstrate the importance of internal controls in order to expect the employees to take the controls seriously.

Explain the characteristics and internal control features of an imprest fund.

The initial entry to establish a petty cash fund involves a debit to cash and a credit to petty cash.

Classify each of the following reconciling items of the Tic and Tac Company as: -Collection of note receivable plus interest revenue by bank ________

When sales revenue exceeds cash receipts, the difference is:

Which of the following items are both reconciling items on the book side of the reconciliation?

The evaluated receipts settlement procedure streamlines payment processing by eliminating the need for a receiving report.

The sole purpose of systems of internal control is to detect fraud.

A ________ limits access to a local network.

All of the following are items that cause a difference between the bank balance and the book balance except:

The following data are available for Remas Designs for October: Book balance, October 31 \ 5,600 Outstanding cheques 584 Deposits in transit 2,500 Service charges 75 Interest revenue 25 What is the adjusted book balance on October 31 for Remas Designs based on the above data?

If the bank mistakenly recorded a $29 payment as $92, the error would be shown on the bank reconciliation as a:

The controller is responsible for cash management in an organization.

If the bank mistakenly recorded a $17 deposit as $71, the error would be shown on the bank reconciliation as a:

Classify each of the following reconciling items of the Tic and Tac Company as: -Bank added deposit to Tic and Tac's account in error ________

If a cash register is short by $19, and the cash register tape totalled $1,550, then:

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters