Question 1

The amount of the outstanding checks is included on the bank reconciliation as a(n):

Accepted Answer

A) deduction from the cash balance per books. 
B) addition to the cash balance per bank. 
C) deduction from the cash balance per bank. 
D) addition to the cash balance per books. 
A) deduction from the cash balance per books. 
B) addition to the cash balance per bank. 
C) deduction from the cash balance per bank. 
D) addition to the cash balance per books.

Question 2

The internal control environment is enhanced by the hiring and retention of competent,honest employees.

Accepted Answer

A) True 
 B)False

Question 3

What is a special-purpose cash fund? What is its purpose? Give two examples.

Accepted Answer

A special-purpose cash fund is

Question 4

A minimum cash balance required by a bank is called:

Accepted Answer

A) cash in bank. 
B) compensating balance. 
C) average balance. 
D) adjusted balance. 
A) cash in bank. 
B) compensating balance. 
C) average balance. 
D) adjusted balance.

Question 5

A credit memorandum from the bank :

Accepted Answer

A) decreases a bank customer's account. 
B) is used to show a bank service charge. 
C) shows that a company has deposited a customer's NSF check. 
D) shows the bank has collected a note receivable for the customer. 
A) decreases a bank customer's account. 
B) is used to show a bank service charge. 
C) shows that a company has deposited a customer's NSF check. 
D) shows the bank has collected a note receivable for the customer.

Question 6

The bank informs the depositor of bank service charges by including a credit memorandum with an monthly bank statement.

Accepted Answer

A) True 
 B)False

Question 7

An element of internal control is:

Accepted Answer

A) generally accepted accounting principles. 
B) control procedures. 
C) special-purpose fund. 
D) electronic funds transfer. 
A) generally accepted accounting principles. 
B) control procedures. 
C) special-purpose fund. 
D) electronic funds transfer.

Question 8

Why would a bank require a company to maintain a compensating balance?

Accepted Answer

Usually it is part o

Question 9

The bank reconciliation:

Accepted Answer

A) should be prepared by an employee who records cash transactions. 
B) is part of the internal control system. 
C) is for information purposes only. 
D) is sent to the bank for verification. 
A) should be prepared by an employee who records cash transactions. 
B) is part of the internal control system. 
C) is for information purposes only. 
D) is sent to the bank for verification.

Question 10

Internal controls are important because they:

Accepted Answer

A) deter fraud and prevent misleading financial statements. 
B) eliminate fraud. 
C) ensure that the company maintains a compensating balance. 
D) guarantee accurate financial statements. 
A) deter fraud and prevent misleading financial statements. 
B) eliminate fraud. 
C) ensure that the company maintains a compensating balance. 
D) guarantee accurate financial statements.

Question 11

Which of the following reflects a weak internal control system?

Accepted Answer

A) All employees are well supervised. 
B) A single employee is responsible for comparing a receiving report to an invoice. 
C) All employees must take their vacations. 
D) A single employee is responsible for the collecting and recording of cash. 
A) All employees are well supervised. 
B) A single employee is responsible for comparing a receiving report to an invoice. 
C) All employees must take their vacations. 
D) A single employee is responsible for the collecting and recording of cash.

Question 12

The ratio of cash to monthly cash expenses is computed as .

Accepted Answer

A) monthly cash expenses divided by cash 
B) current assets divided by monthly cash expenses 
C) cash divided by cash equivalents 
D) cash and cash equivalents divided by monthly cash expenses 
A) monthly cash expenses divided by cash 
B) current assets divided by monthly cash expenses 
C) cash divided by cash equivalents 
D) cash and cash equivalents divided by monthly cash expenses

Question 13

The amount of the "adjusted balance" appearing on a bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date after all adjusting entries have been entered.

Accepted Answer

A) True 
 B)False

Question 14

,which constitute one of the most important elements of internal control,include separating operations,custody of assets,and accounting.

Accepted Answer

A) Risk assessment 
B) Control Procedures 
C) Control environment 
D) Monitoring 
A) Risk assessment 
B) Control Procedures 
C) Control environment 
D) Monitoring

Question 15

The Sarbanes-Oxley Act of 2002 applies to all publicly held companies.

Accepted Answer

A) True 
 B)False

Question 16

The bank statement for Exible Co.indicates a balance of $10,252.50 on June 30,2015.The cash account for the company had a balance of $4,787.10.Prepare a bank reconciliation on the basis of the following reconciling items:

Accepted Answer

Exible Co. Bank Reconciliation June 30,2

Question 17

Cash equivalents include:

Accepted Answer

A) checks. 
B) coins and currency. 
C) money market funds and commercial paper. 
D) stocks and short-term bonds. 
A) checks. 
B) coins and currency. 
C) money market funds and commercial paper. 
D) stocks and short-term bonds.

Question 18

Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer.What adjustment is required in the depositor's accounts?

Accepted Answer

A) Increase Notes Receivable; decrease Cash 
B) Increase Cash; increase Miscellaneous Income 
C) Increase Cash; decrease Notes Receivable 
D) Increase Accounts Receivable; decrease Cash 
A) Increase Notes Receivable; decrease Cash 
B) Increase Cash; increase Miscellaneous Income 
C) Increase Cash; decrease Notes Receivable 
D) Increase Accounts Receivable; decrease Cash

Question 19

Accompanying the bank statement was a debit memorandum for bank service charges.What adjustment is required in the depositor's accounts?

Accepted Answer

A) Increase Miscellaneous Expense; decrease Cash 
B) Increase Cash; increase Other Income 
C) Increase Cash; increase Accounts Payable 
D) Decrease Accounts Payable; decrease Cash 
A) Increase Miscellaneous Expense; decrease Cash 
B) Increase Cash; increase Other Income 
C) Increase Cash; increase Accounts Payable 
D) Decrease Accounts Payable; decrease Cash

Question 20

Describe the features of a voucher system and list typical supporting documents for a voucher.

Accepted Answer

A voucher system is used to control cash

The amount of the outstanding checks is included on the bank reconciliation as a(n):

The internal control environment is enhanced by the hiring and retention of competent,honest employees.

What is a special-purpose cash fund? What is its purpose? Give two examples.

A minimum cash balance required by a bank is called:

A credit memorandum from the bank :

The bank informs the depositor of bank service charges by including a credit memorandum with an monthly bank statement.

An element of internal control is:

Why would a bank require a company to maintain a compensating balance?

The bank reconciliation:

Internal controls are important because they:

Which of the following reflects a weak internal control system?

The ratio of cash to monthly cash expenses is computed as .

The amount of the "adjusted balance" appearing on a bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date after all adjusting entries have been entered.

,which constitute one of the most important elements of internal control,include separating operations,custody of assets,and accounting.

The Sarbanes-Oxley Act of 2002 applies to all publicly held companies.

The bank statement for Exible Co.indicates a balance of $10,252.50 on June 30,2015.The cash account for the company had a balance of $4,787.10.Prepare a bank reconciliation on the basis of the following reconciling items:

Cash equivalents include:

Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer.What adjustment is required in the depositor's accounts?

Accompanying the bank statement was a debit memorandum for bank service charges.What adjustment is required in the depositor's accounts?

Describe the features of a voucher system and list typical supporting documents for a voucher.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 5: Sarbanes-Oxley, internal Control, and Cash

The amount of the outstanding checks is included on the bank reconciliation as a(n):

The internal control environment is enhanced by the hiring and retention of competent,honest employees.

What is a special-purpose cash fund? What is its purpose? Give two examples.

A minimum cash balance required by a bank is called:

A credit memorandum from the bank :

The bank informs the depositor of bank service charges by including a credit memorandum with an monthly bank statement.

An element of internal control is:

Why would a bank require a company to maintain a compensating balance?

The bank reconciliation:

Internal controls are important because they:

Which of the following reflects a weak internal control system?

The ratio of cash to monthly cash expenses is computed as .

The amount of the "adjusted balance" appearing on a bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date after all adjusting entries have been entered.

,which constitute one of the most important elements of internal control,include separating operations,custody of assets,and accounting.

The Sarbanes-Oxley Act of 2002 applies to all publicly held companies.

The bank statement for Exible Co.indicates a balance of $10,252.50 on June 30,2015.The cash account for the company had a balance of $4,787.10.Prepare a bank reconciliation on the basis of the following reconciling items:

Cash equivalents include:

Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer.What adjustment is required in the depositor's accounts?

Accompanying the bank statement was a debit memorandum for bank service charges.What adjustment is required in the depositor's accounts?

Describe the features of a voucher system and list typical supporting documents for a voucher.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters