Question 1

Which of the following is an internal control procedure relating to cash payments?

Accepted Answer

A) Completing a bank deposit. 
B) The use of cash count sheets. 
C) Comparing cash register records with the bank deposit. 
D) Using an imprest system. 
A) Completing a bank deposit. 
B) The use of cash count sheets. 
C) Comparing cash register records with the bank deposit. 
D) Using an imprest system.

Question 2

A $6,000 bank deposit made on the last day of the month did not appear on this month's bank statement.How would this item be treated on the bank reconciliation?

Accepted Answer

A) It would be deducted from the book balance. 
B) It would be added to the bank balance. 
C) It would be deducted from the bank balance. 
D) It would be added to the book balance. 
A) It would be deducted from the book balance. 
B) It would be added to the bank balance. 
C) It would be deducted from the bank balance. 
D) It would be added to the book balance.

Question 3

From the creditor's perspective,which of the following help to ensure a company will be able to repay a loan?

Accepted Answer

A) Control environment 
B) Loan covenants 
C) Control activities 
D) Monitoring activities 
A) Control environment 
B) Loan covenants 
C) Control activities 
D) Monitoring activities

Question 4

McDermott Company's bank statement for September 30 showed an ending cash balance of $1,350.The company's Cash account in its general ledger showed a $995 debit balance.
The following information was also available as of September 30.
The bank deducted $125 for an NSF check from a customer deposited on September 15.
The September 30 cash receipts,$1,250,were placed in the bank's night depository after banking hours on that date and this amount did not appear on the September 30 bank statement.
A $15 debit memorandum for checks printed by the bank was included with the canceled checks.
Outstanding checks amounted to $1,145.
Included with the bank statement was a credit memo in the amount of $875 for an EFT in payment of a customer's account.
Included with the canceled checks was a check for $275,drawn on the account of another company.
Required:
Part a.Prepare a bank reconciliation as of September 30.
Part b.Prepare the journal entries for the items on the company's bank reconciliation as of September 30.

Accepted Answer

Part a.
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Question 5

Lenore,Inc.gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation:   What journal entry would Lenore,Inc.be required to record for the interest received from the bank?

Accepted Answer

A) Debit Interest Revenue and credit Cash for $1,700. 
B) No journal entry is required because the bank is aware of the interest payment. 
C) Debit Interest Receivable and credit Interest Revenue for $1,700. 
D) Debit Cash and credit Interest Revenue for $1,700. 
A) Debit Interest Revenue and credit Cash for $1,700. 
B) No journal entry is required because the bank is aware of the interest payment. 
C) Debit Interest Receivable and credit Interest Revenue for $1,700. 
D) Debit Cash and credit Interest Revenue for $1,700.

Question 6

The principles of internal control include which of the following?

Accepted Answer

A) Monitor activities 
B) Segregate duties 
C) Assess risk 
D) Control the environment 
A) Monitor activities 
B) Segregate duties 
C) Assess risk 
D) Control the environment

Question 7

All of the following are requirements of the Sarbanes-Oxley Act (SOX)except:

Accepted Answer

A) tip lines that allow employees to secretly submit concerns about questionable accounting or auditing practices. 
B) fines of up to $5 million plus repayment of any fraud proceeds. 
C) evaluation and reporting on the effectiveness of internal control over financial reporting for large public companies by external auditors. 
D) evaluation and reporting on the effectiveness of internal control over financial reporting for all public companies by management with disclosure that management is not responsible for the internal control system. 
A) tip lines that allow employees to secretly submit concerns about questionable accounting or auditing practices. 
B) fines of up to $5 million plus repayment of any fraud proceeds. 
C) evaluation and reporting on the effectiveness of internal control over financial reporting for large public companies by external auditors. 
D) evaluation and reporting on the effectiveness of internal control over financial reporting for all public companies by management with disclosure that management is not responsible for the internal control system.

Which of the following is an internal control procedure relating to cash payments?

A $6,000 bank deposit made on the last day of the month did not appear on this month's bank statement.How would this item be treated on the bank reconciliation?

From the creditor's perspective,which of the following help to ensure a company will be able to repay a loan?

Lenore,Inc.gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation: What journal entry would Lenore,Inc.be required to record for the interest received from the bank?

The principles of internal control include which of the following?

All of the following are requirements of the Sarbanes-Oxley Act (SOX)except:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 5: Fraud,Internal Control,and Cash

Which of the following is an internal control procedure relating to cash payments?

A $6,000 bank deposit made on the last day of the month did not appear on this month's bank statement.How would this item be treated on the bank reconciliation?

From the creditor's perspective,which of the following help to ensure a company will be able to repay a loan?

Lenore,Inc.gathered the following information from its accounting records and the October bank statement to prepare the October bank reconciliation: What journal entry would Lenore,Inc.be required to record for the interest received from the bank?

The principles of internal control include which of the following?

All of the following are requirements of the Sarbanes-Oxley Act (SOX)except:

Business Decisions and Financial Accounting

The Balance Sheet

The Income Statement

Adjustments,Financial Statements,and Financial Results

Merchandising Operations and the Multistep Income Statement

Inventory and Cost of Goods Sold

Receivables,Bad Debt Expense,and Interest Revenue

Long-Lived Tangible and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters