Question 1

Which of the following items found on a bank reconciliation does NOT require an adjusting entry?

Accepted Answer

A)  Interest earned 
B)  A bank service charge 
C)  A note collected by the bank 
D)  Deposits in transit 
A)  Interest earned 
B)  A bank service charge 
C)  A note collected by the bank 
D)  Deposits in transit D

Question 2

Sarbanes-Oxley was passed in response to which of the following?

Accepted Answer

A)  The stock market crash of 2002 
B)  The savings and loan bailout 
C)  The accounting scandals of WorldCom and Enron 
D)  The mounting government deficit 
A)  The stock market crash of 2002 
B)  The savings and loan bailout 
C)  The accounting scandals of WorldCom and Enron 
D)  The mounting government deficit C

Question 3

A company has a petty cash fund amount of $200.When replenished,it has petty cash receipts of $15 for gas expense,$23 for postage expense,$18 for supplies expense and $12 for miscellaneous expenses.In the journal entry,Cash would be credited for:

Accepted Answer

A)  $68. 
B)  $132. 
C)  $200. 
D)  $42 
A)  $68. 
B)  $132. 
C)  $200. 
D)  $42 A

Question 4

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Accepted Answer

A) True 
 B)False

Question 5

Under the Sarbanes-Oxley Act,the outside auditor must issue an internal control report.

Accepted Answer

A) True 
 B)False

Question 6

Please refer to the following bank reconciliation: $\begin{array}{lr}
\begin{array}{lr}
\text { BANK }\
\hline\text { Balance, June } 30,2014 & \$ 10,241.43 \
\text { ADD: } & \
\text { Deposit in transit } & 5,113.40 \
\
\
\text { LESS: } & \
\text { Outstanding Check\# 506 } & (1,948.52)\
\text { Outstanding Check\# 510 } & (1,800.25)  \
\
\text { Adjusted balance, June 30,2014 }&\underline{ \$ 11,606.06 }\
\end{array}
\begin{array}{|lr}
\text { BOOK }\
\hline \text { Balance, June } 30,2014 & \$ 9,745.06 \
\text { ADD: } & \
\text { Note collected by bank } &1,900.00  \ 
\text { Interest revenue } & 75.00 \
& \
\text { LESS: } & \
\text { NSF check } &(79.00) \
\text { Bank service charge } & (35.00)  \
\
\text { Adjusted balance, June } 30,2014 & \underline{\$ 11,606.06} \

\end{array}
\end{array}$

- Please prepare the adjusting entry for the fourth reconciling item (bank service charge.)
 $$\begin{array} { | l | r | r | } 
\hline \quad\quad\quad&\quad&\quad \
\hline \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | r | r

Question 7

If the bank reconciliation includes a bank service charge,a journal entry is required which debits Cash and credits Miscellaneous expense.

Accepted Answer

A) True 
 B)False

Question 8

The following information is needed to reconcile the cash balance for Woods Paper Products.
• A deposit of $5,794.62 is in transit.
• Outstanding checks total $1,533.25.
• The book balance is $5,695.62.
• The bookkeeper recorded a $1,524.00 check as $15,240 in payment of the current month's rent.
• The bank balance at February 28,2008 was $16,500.25.
• A deposit of $300 was credited by the bank for $3,000.
• A customer's check for $1,280 was returned for nonsufficient funds.
• The bank service charge is $70.
-
Which of the following journal entries is needed to adjust for the NSF check?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,280 & \
\hline \text { Sales revenue } & & 1,280 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { NSF check } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts receivable } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,280 & \
\hline \text { Sales revenue } & & 1,280 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { NSF check } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts payable } & 1,280 & \
\hline \text { Cash } & & 1,280 \
\hline
\end{array}$$

Question 9

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

Accepted Answer

A)  Errors made by the bank revealed by the bank reconciliation 
B)  All items on the bank's side 
C)  Errors made on the books revealed by the bank reconciliation 
D)  Outstanding checks 
A)  Errors made by the bank revealed by the bank reconciliation 
B)  All items on the bank's side 
C)  Errors made on the books revealed by the bank reconciliation 
D)  Outstanding checks

Question 10

In the following situation,which internal control procedure needs strengthening?
- Hofstra Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not.

Accepted Answer

A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents 
A)  Assignment of responsibilities 
B)  Competent, reliable, and ethical personnel 
C)  Separation of duties 
D)  Documents

Question 11

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

Accepted Answer

A)  An addition on the bank side 
B)  A deduction on the bank side 
C)  A deduction on the book side 
D)  An addition on the book side 
A)  An addition on the bank side 
B)  A deduction on the bank side 
C)  A deduction on the book side 
D)  An addition on the book side

Question 12

A malicious program that enters program code or destroys data without authorization is an example of:

Accepted Answer

A)  a password. 
B)  phishing. 
C)  encryption. 
D)  a virus. 
A)  a password. 
B)  phishing. 
C)  encryption. 
D)  a virus.

Question 13

An accountant is under pressure to maximize the company's net income at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

Accepted Answer

A) True 
 B)False

Question 14

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.

Accepted Answer

A) True 
 B)False

Question 15

A company received a bank statement showing a balance of $62,300.Reconciling items were outstanding checks of $1,450 and a deposit in transit of $8,500.What is the company's adjusted bank balance?

Accepted Answer

A)  $72,250 
B)  $60,850 
C)  $69,350 
D)  $70,850 
A)  $72,250 
B)  $60,850 
C)  $69,350 
D)  $70,850

Question 16

A petty cash fund was established with a $400 balance.It currently has cash of $9 and petty cash tickets as shown below. $\begin{array}{|l|r|}
\hline \text { Travel expense } & \$ 120 \
\hline \text { Office supplies } & \$ 200 \
\hline \text { Equipment rental expense } & \$ 70\\hline 
\end{array}$ The journal entry to replenish the account would be which of the following:

Accepted Answer

A)  Debit to Cash short & over for $1 
B)  Credit Cash short & over for $1 
C)  Debit Petty cash fund $1 
D)  Credit Petty cash fund $1 
A)  Debit to Cash short & over for $1 
B)  Credit Cash short & over for $1 
C)  Debit Petty cash fund $1 
D)  Credit Petty cash fund $1

Question 17

As long as the same person deposits customer checks and records the deposits into the ledger,there will be good internal control over cash receipts.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT one of the benefits provided by internal control?

Accepted Answer

A)  To reduce waste 
B)  To insure that better business decisions are made 
C)  To offer protection against theft 
D)  To reduce inefficiency 
A)  To reduce waste 
B)  To insure that better business decisions are made 
C)  To offer protection against theft 
D)  To reduce inefficiency

Question 19

Which of the following items will NOT appear on the book side of the reconciliation?

Accepted Answer

A)  The bank collected a note receivable of $1,000. 
B)  A nonsufficient funds check of $75 was returned to the bank. 
C)  A deposit was in transit. 
D)  The bank charged a service fee of $20. 
A)  The bank collected a note receivable of $1,000. 
B)  A nonsufficient funds check of $75 was returned to the bank. 
C)  A deposit was in transit. 
D)  The bank charged a service fee of $20.

Question 20

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Accepted Answer

A)  Nonsufficient funds checks 
B)  Outstanding checks 
C)  Deposits in transit 
D)  Canceled checks 
A)  Nonsufficient funds checks 
B)  Outstanding checks 
C)  Deposits in transit 
D)  Canceled checks

Which of the following items found on a bank reconciliation does NOT require an adjusting entry?

Sarbanes-Oxley was passed in response to which of the following?

A company has a petty cash fund amount of $200.When replenished,it has petty cash receipts of $15 for gas expense,$23 for postage expense,$18 for supplies expense and $12 for miscellaneous expenses.In the journal entry,Cash would be credited for:

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Under the Sarbanes-Oxley Act,the outside auditor must issue an internal control report.

If the bank reconciliation includes a bank service charge,a journal entry is required which debits Cash and credits Miscellaneous expense.

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

In the following situation,which internal control procedure needs strengthening? - Hofstra Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not.

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

A malicious program that enters program code or destroys data without authorization is an example of:

An accountant is under pressure to maximize the company's net income at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.

A company received a bank statement showing a balance of $62,300.Reconciling items were outstanding checks of $1,450 and a deposit in transit of $8,500.What is the company's adjusted bank balance?

A petty cash fund was established with a $400 balance.It currently has cash of $9 and petty cash tickets as shown below. Travel expense \ 120 Office supplies \ 200 Equipment rental expense \ 70 The journal entry to replenish the account would be which of the following:

As long as the same person deposits customer checks and records the deposits into the ledger,there will be good internal control over cash receipts.

Which of the following is NOT one of the benefits provided by internal control?

Which of the following items will NOT appear on the book side of the reconciliation?

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 7: Internal Control and Cash

Which of the following items found on a bank reconciliation does NOT require an adjusting entry?

Sarbanes-Oxley was passed in response to which of the following?

A company has a petty cash fund amount of $200.When replenished,it has petty cash receipts of $15 for gas expense,$23 for postage expense,$18 for supplies expense and $12 for miscellaneous expenses.In the journal entry,Cash would be credited for:

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Under the Sarbanes-Oxley Act,the outside auditor must issue an internal control report.

If the bank reconciliation includes a bank service charge,a journal entry is required which debits Cash and credits Miscellaneous expense.

Which of the following items would require an adjusting entry after preparation of the bank reconciliation?

In the following situation,which internal control procedure needs strengthening? - Hofstra Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not.

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

A malicious program that enters program code or destroys data without authorization is an example of:

An accountant is under pressure to maximize the company's net income at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus payment tickets)totaling the same amount.

A company received a bank statement showing a balance of $62,300.Reconciling items were outstanding checks of $1,450 and a deposit in transit of $8,500.What is the company's adjusted bank balance?

A petty cash fund was established with a $400 balance.It currently has cash of $9 and petty cash tickets as shown below. Travel expense \ 120 Office supplies \ 200 Equipment rental expense \ 70 The journal entry to replenish the account would be which of the following:

As long as the same person deposits customer checks and records the deposits into the ledger,there will be good internal control over cash receipts.

Which of the following is NOT one of the benefits provided by internal control?

Which of the following items will NOT appear on the book side of the reconciliation?

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Receivables

Plant Assets and Intangibles

Current Liabilities and Payroll

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters