Question 1

______________________________ are the crucial link between economic transactions entered into by an entity and the accounting for these events.

Accepted Answer

The answer of ______________________________ are the crucial link between economic...

Question 2

The notification accompanying a check that indicates the specific invoice being paid is called a

Accepted Answer

A)  remittance advice 
B)  voucher 
C)  debit memo 
D)  credit memo 
A)  remittance advice 
B)  voucher 
C)  debit memo 
D)  credit memo

Question 3

____________________ controls within a company are more concerned with efficient operations and the adherence to management policies than with the accurate reporting of financial information.

Accepted Answer

The answer of ____________________ controls within a company are more...

Question 4

No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

Accepted Answer

A) True 
 B)False

Question 5

An internal control system consists of all the following policies and procedures except:

Accepted Answer

A)  Those necessary to ensure the safeguarding of an entity's assets. 
B)  Those necessary to ensure that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations. 
C)  Those necessary to ensure the reliability of its accounting records. 
D)  Those necessary to ensure the accomplishment of its overall objectives. 
A)  Those necessary to ensure the safeguarding of an entity's assets. 
B)  Those necessary to ensure that cash on hand and on deposit in checking accounts is beyond the minimal amount for ongoing operations. 
C)  Those necessary to ensure the reliability of its accounting records. 
D)  Those necessary to ensure the accomplishment of its overall objectives.

Question 6

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Accepted Answer

A)  The purchase requisition, purchase order, receiving report, and invoice are compared. 
B)  The extensions and footings on the invoice are verified. 
C)  An employee verifies that all of the approval activities have been completed before a check is prepared. 
D)  The purchasing department prepares a voucher to request payment. 
A)  The purchase requisition, purchase order, receiving report, and invoice are compared. 
B)  The extensions and footings on the invoice are verified. 
C)  An employee verifies that all of the approval activities have been completed before a check is prepared. 
D)  The purchasing department prepares a voucher to request payment.

Question 7

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. Extensions and footings on purchase invoices are verified before the invoices are approved for payment

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 one of the following would not appear on a bank statement for a checking account?

Accepted Answer

A)  Service charges 
B)  Interest earned 
C)  Outstanding checks 
D)  Deposits 
A)  Service charges 
B)  Interest earned 
C)  Outstanding checks 
D)  Deposits

Question 9

The following set of items describes activities completed by a company in purchasing and paying for merchandise.For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. All documents attached to an invoice approval form are canceled before a check is signed.

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 10

Which one of the following items is a reconciling item on the bank side of a bank reconciliation?

Accepted Answer

A)  Canceled checks 
B)  Outstanding checks 
C)  NSF checks 
D)  Service charge 
A)  Canceled checks 
B)  Outstanding checks 
C)  NSF checks 
D)  Service charge

Question 11

Match the following terms with the best definitions for questions 212 through 219.
-The practice of not combining physical custody of assets with the function of accounting for those assets.

Accepted Answer

A) Purchase requisition. 
B) Receiving Report. 
C) Vendor Invoice. 
D) Check. 
E) Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control. 
A) Purchase requisition. 
B) Receiving Report. 
C) Vendor Invoice. 
D) Check. 
E) Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Question 12

While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company.Sonic recorded the receipt as $729 and the correct amount of the check was $279.What reconciling adjustment is required?

Accepted Answer

A)  Add $450 to the company's book balance 
B)  Deduct $450 from the company's book balance 
C)  Add $450 to the bank statement balance 
D)  Deduct $450 from the bank statement balance 
A)  Add $450 to the company's book balance 
B)  Deduct $450 from the company's book balance 
C)  Add $450 to the bank statement balance 
D)  Deduct $450 from the bank statement balance

Question 13

Delmont Corp.prepares monthly bank reconciliations of its checking account balance.The bank statement for May, 2016, indicated the following: $\begin{array}{lr}
\text { Balance, May 31, } 2016 & \$ 29,700 \
\text { Service charge for May } & 80 \
\text { Interest earned during May } & 120 \
\text { NSF check from Viacon Corp. (deposited by Delmont) } & 230 \
\text { Note ( } \$ 4,000) \text { and interest ( } \$ 100) \text { collected for Delmont from a } & 4,100 \
\text { customer of Delmont's } &
\end{array}$

$\text { An analysis of canceled checks and deposits and the records of Delmont Corp. revealed the following items: }$

$\begin{array}{lr}
\text { Checking account balance per Delmont's books } & \$ 26,040 \
\text { Outstanding checks as of May 31 } & 2,950 \
\text { Deposit in transit at May 31 } & 3,110 \
\text { Error in recording check \# 4456 issued by Delmont } & 90\
\end{array}$ ​
The correct amount of check #4456 is $760.It was recorded as a cash disbursement of $670 by mistake.The check was issued to pay for merchandise purchases.The check appeared on the bank statement correctly.
A) Prepare a bank reconciliation schedule at May 31, 2016 in proper form.
​
B) Explain how checking accounts, bank statements, and bank reconciliations are used by Delmont to control its cash.

Accepted Answer

@#IMG-DLM& ​
B) Checking accounts allow entities a

Question 14

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Accepted Answer

A) True 
 B)False

Question 15

Match the following terms with the best definitions for questions 212 through 219.
-Actions that company personnel take to make sure that policies set forth by management are followed.

Accepted Answer

A) Purchase requisition. 
B) Receiving Report. 
C) Vendor Invoice. 
D) Check. 
E) Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control. 
A) Purchase requisition. 
B) Receiving Report. 
C) Vendor Invoice. 
D) Check. 
E) Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Question 16

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 17

An accounting system must be computerized in order to ensure the company has proper internal control.

Accepted Answer

A) True 
 B)False

Question 18

Match the term with the statement that best defines it.
-Consists of all methods and records used to accurately report an entity's transactions.

Accepted Answer

A) Accounting controls 
B) Accounting system 
C) Administrative controls 
D) Audit committee 
E) Board of directors 
A) Accounting controls 
B) Accounting system 
C) Administrative controls 
D) Audit committee 
E) Board of directors

Question 19

An amount recorded as an increase in the company's cash account at month-end, but which has not yet been reflected on the bank statement is called a(n) _________________________.

Accepted Answer

The answer of An amount recorded as an increase in...

Question 20

A good system of internal controls requires that the physical custody of assets be separated from the accounting for those assets.This concept is known as safeguarding assets and records.

Accepted Answer

A) True 
 B)False

______________________________ are the crucial link between economic transactions entered into by an entity and the accounting for these events.

The notification accompanying a check that indicates the specific invoice being paid is called a

____________________ controls within a company are more concerned with efficient operations and the adherence to management policies than with the accurate reporting of financial information.

No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

An internal control system consists of all the following policies and procedures except:

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Which one of the following would not appear on a bank statement for a checking account?

Which one of the following items is a reconciling item on the bank side of a bank reconciliation?

Match the following terms with the best definitions for questions 212 through 219. -The practice of not combining physical custody of assets with the function of accounting for those assets.

While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company.Sonic recorded the receipt as $729 and the correct amount of the check was $279.What reconciling adjustment is required?

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Match the following terms with the best definitions for questions 212 through 219. -Actions that company personnel take to make sure that policies set forth by management are followed.

Which one of the following statements is true?

An accounting system must be computerized in order to ensure the company has proper internal control.

Match the term with the statement that best defines it. -Consists of all methods and records used to accurately report an entity's transactions.

An amount recorded as an increase in the company's cash account at month-end, but which has not yet been reflected on the bank statement is called a(n) _________________________.

A good system of internal controls requires that the physical custody of assets be separated from the accounting for those assets.This concept is known as safeguarding assets and records.

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 6: Cash and Internal Control

______________________________ are the crucial link between economic transactions entered into by an entity and the accounting for these events.

The notification accompanying a check that indicates the specific invoice being paid is called a

____________________ controls within a company are more concerned with efficient operations and the adherence to management policies than with the accurate reporting of financial information.

No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

An internal control system consists of all the following policies and procedures except:

Which one of the following is not a procedure in the approval of a specific invoice for payment?

Which one of the following would not appear on a bank statement for a checking account?

Which one of the following items is a reconciling item on the bank side of a bank reconciliation?

Match the following terms with the best definitions for questions 212 through 219. -The practice of not combining physical custody of assets with the function of accounting for those assets.

While reconciling the checking account, an accountant with Sonic Corporation noticed that an error had been made in recording a check received by the company.Sonic recorded the receipt as $729 and the correct amount of the check was $279.What reconciling adjustment is required?

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Match the following terms with the best definitions for questions 212 through 219. -Actions that company personnel take to make sure that policies set forth by management are followed.

Which one of the following statements is true?

An accounting system must be computerized in order to ensure the company has proper internal control.

Match the term with the statement that best defines it. -Consists of all methods and records used to accurately report an entity's transactions.

An amount recorded as an increase in the company's cash account at month-end, but which has not yet been reflected on the bank statement is called a(n) _________________________.

A good system of internal controls requires that the physical custody of assets be separated from the accounting for those assets.This concept is known as safeguarding assets and records.

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 True Value of Money

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters