Question 1

Which of the following should not be considered cash by an accountant?

Accepted Answer

A) money orders 
B) bank checking accounts 
C) postage stamps 
D) travelers' checks 
A) money orders 
B) bank checking accounts 
C) postage stamps 
D) travelers' checks

Question 2

The ratio of cash to monthly cash expenses includes both cash and cash equivalents in the numerator.

Accepted Answer

A) True 
 B)False

Question 3

A necessary element of internal control is

Accepted Answer

A) database 
B) systems design 
C) systems analysis 
D) information and communication 
A) database 
B) systems design 
C) systems analysis 
D) information and communication

Question 4

The bank reconciliation is an important part of the system of internal controls.

Accepted Answer

A) True 
 B)False

Question 5

The cash account in the company's ledger is an

Accepted Answer

A) asset with a normal debit balance 
B) asset with a normal credit balance 
C) liability with a normal debit balance 
D) liability with a normal credit balance 
A) asset with a normal debit balance 
B) asset with a normal credit balance 
C) liability with a normal debit balance 
D) liability with a normal credit balance

Question 6

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) debit Notes Receivable; credit Cash 
B) debit Cash; credit Miscellaneous Income 
C) debit Cash; credit Notes Receivable and Interest Revenue 
D) debit Accounts Receivable; credit Cash 
A) debit Notes Receivable; credit Cash 
B) debit Cash; credit Miscellaneous Income 
C) debit Cash; credit Notes Receivable and Interest Revenue 
D) debit Accounts Receivable; credit Cash

Question 8

A voucher is usually supported by

Accepted Answer

A) a supplier's invoice 
B) a purchase order 
C) a receiving report 
D) all of these 
A) a supplier's invoice 
B) a purchase order 
C) a receiving report 
D) all of these

Question 9

In preparing a bank reconciliation,the amount indicated by a debit memo for bank service charges is added to the balance per company's records.

Accepted Answer

A) True 
 B)False

Question 10

The Scharf Company is a retailer located in a state without sales tax.The following data was given to you to complete the transactions for the day's sales to be recorded.All cash drawers start with $100 in change.
 $\begin{array}{llll}
& \underline {\text { Reg.\#1    }} & \underline {\text {   Reg. \#2  }} & \underline {\text {  Reg. \#3   }} & \underline {\text {  Reg. \#4   }}   \
\text {  Cash in drawer   }&\$ 974.50 & \$ 1,383.66 & \$ 939.46 & \$ 1,137.91 \
\text {  Sales reading   }&\$ 879.50 & \$ 1,298.16 & \$ 839.46 & \$ 1,030.33\
\hline  \text {  Difference     }
\end{array}$ Record the journal entries for EACH cash register to determine the cashier's accuracy.

Accepted Answer

Each cash drawer starts with $100.This m

Question 11

The petty cash fund eliminates the need for a bank checking account.

Accepted Answer

A) True 
 B)False

Question 12

The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.

Accepted Answer

A) True 
 B)False

Question 13

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Accepted Answer

A) True 
 B)False

Question 14

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Accepted Answer

A) accounting controls 
B) cash controls 
C) FASB controls 
D) GAAP controls 
A) accounting controls 
B) cash controls 
C) FASB controls 
D) GAAP controls

Question 15

Credit memos from the bank

Accepted Answer

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

Question 16

The last custodian of the petty cash fund was hospitalized and you have been asked to take stock of the fund and replenish it.When you receive the fund,it has $299 in cash and receipts as follows:
 $\begin{array}{llcc}
  \text { Office supplies  } & \$ 295  \
 \text { Advertising } & 120  \
\text {Transportation by Taxi} & 75 \
\end{array}$
 The petty cash fund was established to have $800 in it.
Based on what you have found,what journal entry should be recorded to replenish the fund?

Accepted Answer

The answer of The last custodian of the petty cash...

Question 17

A bank reconciliation should be prepared periodically because

Accepted Answer

A) the company's records and the bank's records are in agreement 
B) the bank has not recorded all of its transactions 
C) any differences between the company's records and the bank's records should be determined,and any errors made by either party should be discovered and corrected 
D) the bank must make sure that its records are correct 
A) the company's records and the bank's records are in agreement 
B) the bank has not recorded all of its transactions 
C) any differences between the company's records and the bank's records should be determined,and any errors made by either party should be discovered and corrected 
D) the bank must make sure that its records are correct

Question 18

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as an

Accepted Answer

A) deduction from the balance per company's records 
B) addition to the balance per bank statement 
C) deduction from the balance per bank statement 
D) addition to the balance per company's records 
A) deduction from the balance per company's records 
B) addition to the balance per bank statement 
C) deduction from the balance per bank statement 
D) addition to the balance per company's records

Question 19

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

Accepted Answer

A) True 
 B)False

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

Which of the following should not be considered cash by an accountant?

The ratio of cash to monthly cash expenses includes both cash and cash equivalents in the numerator.

A necessary element of internal control is

The bank reconciliation is an important part of the system of internal controls.

The cash account in the company's ledger is an

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

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

A voucher is usually supported by

In preparing a bank reconciliation,the amount indicated by a debit memo for bank service charges is added to the balance per company's records.

The petty cash fund eliminates the need for a bank checking account.

The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Credit memos from the bank

A bank reconciliation should be prepared periodically because

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as an

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 7: Sarbanes-Oxley,internal Control,and Cash

Which of the following should not be considered cash by an accountant?

The ratio of cash to monthly cash expenses includes both cash and cash equivalents in the numerator.

A necessary element of internal control is

The bank reconciliation is an important part of the system of internal controls.

The cash account in the company's ledger is an

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

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

A voucher is usually supported by

In preparing a bank reconciliation,the amount indicated by a debit memo for bank service charges is added to the balance per company's records.

The petty cash fund eliminates the need for a bank checking account.

The control environment in an internal control structure is the overall attitude of management and employees about the importance of internal control.

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called

Credit memos from the bank

A bank reconciliation should be prepared periodically because

Accompanying the bank statement was a debit memo for an NSF check received from a customer.This item would be included on the bank reconciliation as an

The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters