Question 1

It is unlikely that a company would want to bond its employees who handle cash or inventory.

Accepted Answer

A) True 
 B)False

Question 2

If employees are bonded

Accepted Answer

A) it means that they are not allowed to handle cash. 
B) they have worked for the company for at least 10 years. 
C) they have been insured against misappropriation of assets. 
D) it is impossible for them to steal from the company. 
A) it means that they are not allowed to handle cash. 
B) they have worked for the company for at least 10 years. 
C) they have been insured against misappropriation of assets. 
D) it is impossible for them to steal from the company.

Question 3

Dekin Company had checks outstanding totaling $34000 on its May bank reconciliation.In June Dekin Company issued checks totaling $212800.The June bank statement shows that $158400 in checks cleared the bank in June.A check from one of Dekin Company's customers in the amount of $1600 was also returned marked "NSF." The amount of outstanding checks on Dekin Company's June bank reconciliation should be

Accepted Answer

A) $86800. 
B) $54400. 
C) $88400. 
D) $20400. 
A) $86800. 
B) $54400. 
C) $88400. 
D) $20400.

Question 4

Which of the following is not one of the main factors that contribute to fraudulent activity?

Accepted Answer

A) Opportunity. 
B) Incompatible duties. 
C) Financial pressure. 
D) Rationalization. 
A) Opportunity. 
B) Incompatible duties. 
C) Financial pressure. 
D) Rationalization.

Question 5

At April 30 Kessler Company has the following bank information: $$\begin{array} { l r } 
\text { Cash balance per bank } & \$ 6,900 \
\text { Outstanding checks } & \$ 420 \
\text { Deposits in transit } & \$ 825 \
\text { Credit memo for interest } & \$ 15 \
\text { Bank service charge } & \$ 30
\end{array}$$ What is Kessler's adjusted cash balance on April 30?

Accepted Answer

A) $7290. 
B) $7320. 
C) $6495. 
D) $7305. 
A) $7290. 
B) $7320. 
C) $6495. 
D) $7305.

Question 6

Ferguson Company is preparing a cash budget for September.The company's cash balance on September 1 is $34800.The company anticipates cash receipts of $167700 and cash disbursements of $175980.If Ferguson desires a cash balance of $36000 it must

Accepted Answer

A) acquire financing of $1200. 
B) acquire financing of $9480. 
C) acquire financing of $7080. 
D) acquire financing of $27720. 
A) acquire financing of $1200. 
B) acquire financing of $9480. 
C) acquire financing of $7080. 
D) acquire financing of $27720.

Question 7

Which of the following would not be included in the definition of cash?

Accepted Answer

A) Money on deposit in a bank. 
B) Coins. 
C) NSF checks. 
D) Petty cash. 
A) Money on deposit in a bank. 
B) Coins. 
C) NSF checks. 
D) Petty cash.

Question 8

Electronic funds transfer (EFT) is a disbursement system that uses a telephone or a computer to transfer cash from one location to another.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Adler Company developed the following reconciling information in preparing its December bank reconciliation: $$\begin{array} { l r } 
\text { Cash balance per bank, } 12 / 31 & \$ 24,000 \
\text { Note receivable collected by bank } & 12,000 \
\text { Outstanding checks } & 18,000 \
\text { Deposits in transit } & 9,000 \
\text { Bank service charges } & 150 \
\text { NSF check } & 2,400
\end{array}$$ Using the above information determine the cash balance per books (before adjustments) for the Adler Company.

Accepted Answer

A) $5550. 
B) $33000. 
C) $17550. 
D) $24000. 
A) $5550. 
B) $33000. 
C) $17550. 
D) $24000.

Question 11

Which one of the following items would not be considered cash?

Accepted Answer

A) Coins. 
B) Money orders. 
C) Currency. 
D) Postdated checks. 
A) Coins. 
B) Money orders. 
C) Currency. 
D) Postdated checks.

Question 12

Which of the following is nota suggested procedure to establish internal control over cash disbursements?

Accepted Answer

A) Anyone can sign the checks. 
B) Different individuals approve and make the payments. 
C) Blank checks are stored with limited access. 
D) The bank statement is reconciled monthly. 
A) Anyone can sign the checks. 
B) Different individuals approve and make the payments. 
C) Blank checks are stored with limited access. 
D) The bank statement is reconciled monthly.

Question 13

Bonding involves all of the following except

Accepted Answer

A) The company obtains insurance protection against misappropriation of assets by a dishonest employee. 
B) The insurance company screens employees before they are added to the policy. 
C) The company informs employees that the insurance company will vigorously prosecute all offenders. 
D) Employees do not commit inappropriate acts because of the threat of prosecution and their loyalty to the employer. 
A) The company obtains insurance protection against misappropriation of assets by a dishonest employee. 
B) The insurance company screens employees before they are added to the policy. 
C) The company informs employees that the insurance company will vigorously prosecute all offenders. 
D) Employees do not commit inappropriate acts because of the threat of prosecution and their loyalty to the employer.

Question 14

A bank reconciliation is generally prepared by the bank and sent to the depositor along with canceled checks.

Accepted Answer

A) True 
 B)False

Question 15

A company maintains the asset account Cash in Bank on its books while the bank maintains a reciprocal account that is

Accepted Answer

A) a contra asset account. 
B) a liability account. 
C) also an asset account. 
D) a stockholders' equity account. 
A) a contra asset account. 
B) a liability account. 
C) also an asset account. 
D) a stockholders' equity account.

Question 16

Mrs.Smith has worked for Bosco Inc.for 20 years without taking a vacation.An internal control feature that would address this situation would be

Accepted Answer

A) human resource controls. 
B) establishment of responsibility. 
C) physical controls. 
D) documentation procedures. 
A) human resource controls. 
B) establishment of responsibility. 
C) physical controls. 
D) documentation procedures.

Question 17

A system of internal control

Accepted Answer

A) is infallible. 
B) can be rendered ineffective by employee collusion. 
C) invariably will have costs exceeding benefits. 
D) is premised on the concept of absolute assurance. 
A) is infallible. 
B) can be rendered ineffective by employee collusion. 
C) invariably will have costs exceeding benefits. 
D) is premised on the concept of absolute assurance.

Question 18

A check written by the company for $275 is incorrectly recorded by the company as $257.On the bank reconciliation the $18 error should be

Accepted Answer

A) added to the balance per books. 
B) deducted from the balance per books. 
C) added to the balance per bank. 
D) deducted from the balance per bank. 
A) added to the balance per books. 
B) deducted from the balance per books. 
C) added to the balance per bank. 
D) deducted from the balance per bank.

Question 19

The following information was taken from Hurlbert Companys' cash budget for the month June $$\begin{array} { l r } 
\text { Beginning cash balance } & \$ 69,000 \
\text { Cash receipts } & 93,000 \
\text { Cash disbursements } & 117,000
\end{array}$$ If the company has a policy of maintaining an end of the month cash balance of $60000 the amount the company would have to borrow is

Accepted Answer

A) $36000. 
B) $15000. 
C) $24000. 
D) $0. 
A) $36000. 
B) $15000. 
C) $24000. 
D) $0.

Question 20

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

Accepted Answer

A) True 
 B)False

It is unlikely that a company would want to bond its employees who handle cash or inventory.

If employees are bonded

Which of the following is not one of the main factors that contribute to fraudulent activity?

At April 30 Kessler Company has the following bank information: Cash balance per bank \ 6,900 Outstanding checks \ 420 Deposits in transit \ 825 Credit memo for interest \ 15 Bank service charge \ 30 What is Kessler's adjusted cash balance on April 30?

Ferguson Company is preparing a cash budget for September.The company's cash balance on September 1 is $34800.The company anticipates cash receipts of $167700 and cash disbursements of $175980.If Ferguson desires a cash balance of $36000 it must

Which of the following would not be included in the definition of cash?

Electronic funds transfer (EFT) is a disbursement system that uses a telephone or a computer to transfer cash from one location to another.

Control over cash disbursements is generally more effective when

Which one of the following items would not be considered cash?

Which of the following is nota suggested procedure to establish internal control over cash disbursements?

Bonding involves all of the following except

A bank reconciliation is generally prepared by the bank and sent to the depositor along with canceled checks.

A company maintains the asset account Cash in Bank on its books while the bank maintains a reciprocal account that is

Mrs.Smith has worked for Bosco Inc.for 20 years without taking a vacation.An internal control feature that would address this situation would be

A system of internal control

A check written by the company for $275 is incorrectly recorded by the company as $257.On the bank reconciliation the $18 error should be

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 5: Fraud, Internal Control, and Cash

It is unlikely that a company would want to bond its employees who handle cash or inventory.

If employees are bonded

Which of the following is not one of the main factors that contribute to fraudulent activity?

At April 30 Kessler Company has the following bank information: Cash balance per bank \ 6,900 Outstanding checks \ 420 Deposits in transit \ 825 Credit memo for interest \ 15 Bank service charge \ 30 What is Kessler's adjusted cash balance on April 30?

Ferguson Company is preparing a cash budget for September.The company's cash balance on September 1 is $34800.The company anticipates cash receipts of $167700 and cash disbursements of $175980.If Ferguson desires a cash balance of $36000 it must

Which of the following would not be included in the definition of cash?

Electronic funds transfer (EFT) is a disbursement system that uses a telephone or a computer to transfer cash from one location to another.

Control over cash disbursements is generally more effective when

Which one of the following items would not be considered cash?

Which of the following is nota suggested procedure to establish internal control over cash disbursements?

Bonding involves all of the following except

A bank reconciliation is generally prepared by the bank and sent to the depositor along with canceled checks.

A company maintains the asset account Cash in Bank on its books while the bank maintains a reciprocal account that is

Mrs.Smith has worked for Bosco Inc.for 20 years without taking a vacation.An internal control feature that would address this situation would be

A system of internal control

A check written by the company for $275 is incorrectly recorded by the company as $257.On the bank reconciliation the $18 error should be

Sound internal control activities dictate that the amount of cash on hand should be kept to a maximum.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters