Question 1

The Petty Cash account is a separate bank account used for small amounts.

Accepted Answer

A) True 
 B)False

Question 2

Match each of the following terms with the appropriate definitions.
-A method of initially recording purchases at the invoice price less any purchase discounts offered by the seller.

Accepted Answer

A) Days' sales uncollected 
B) Gross method 
C) Receiving report 
D) Bank reconciliation 
E) Purchase order
F)Principles of internal control
G)Cash Over and Short
H)Liquidity
I)Net method
J)Voucher system 
A) Days' sales uncollected 
B) Gross method 
C) Receiving report 
D) Bank reconciliation 
E) Purchase order
F)Principles of internal control
G)Cash Over and Short
H)Liquidity
I)Net method
J)Voucher system

Question 3

Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control.

Accepted Answer

A) True 
 B)False

Question 4

Two limitations of internal control systems are ________ and ________.

Accepted Answer

answers c

Question 5

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

Accepted Answer

A)  After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent. 
B)  The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C)  For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank. 
D)  The cashier deposits the money in the bank and the recordkeeper records the amounts received in the accounting records. 
E)  The employees handling the cash receipts are bonded. 
A)  After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent. 
B)  The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C)  For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank. 
D)  The cashier deposits the money in the bank and the recordkeeper records the amounts received in the accounting records. 
E)  The employees handling the cash receipts are bonded.

Question 6

An internal control system consists of the policies and procedures companies use to protect assets,ensure reliable accounting,promote efficient operations,and uphold company policies.

Accepted Answer

A) True 
 B)False

Question 7

The following information is available to reconcile Dibble Co.'s book balance of cash with its bank statement cash balance as of April 30.The April 30 cash balance according to the accounting records is $68,356,and the bank statement cash balance for that date is $73,525.
a.The bank erroneously cleared a $480 check against the account in April that was not issued by Dibble.The check documentation included with the bank statement indicates the check was actually issued by Flushing Co.
b.On April 30,the bank issued a credit memorandum for $53 interest earned on Dibble's account.
c.When the April checks are compared with entries in the accounting records,it is found that Check No.1828 had been correctly drawn for $1,530 to pay for advertising but was erroneously entered in the accounting records as $1,350.
d.A credit memorandum indicates that the bank collected $10,000 cash on a note receivable for Dibble,deducted a $30 collection fee,and credited the balance to the company's Cash account.Dibble did not record this transaction before receiving the statement.
e.A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870 received from a customer.The bank assessed a $25 fee for processing it.
f.Dibble's April 30 daily cash receipts of $5,102 were placed in the bank's night depository on that date,but do not appear on the April 30 bank statement.
g.Dibble's April 30 cash disbursements journal indicates that Check No.1837 for $584 and Check No.1840 for $1,219 were both written and entered in the accounting records,but are not among the canceled checks.
1.Prepare the bank reconciliation for this company as of April 30.
2.Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of April 30.

Accepted Answer

None

Question 8

An ________ refers to the policies and procedures managers use to protect assets,ensure reliable accounting,promote efficient operations,and urge adherence to company policies.

Accepted Answer

internal c

Question 9

A company reported net sales for 2014 of $265,000 and $545,000 for 2015.The year-end balances of accounts receivable were $39,000 for 2014 and $92,000 for 2015.Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

Accepted Answer

Days' Sales Uncollected Ratio = Ending A

Question 10

The number of days' sales uncollected is calculated by:

Accepted Answer

A)  Dividing accounts receivable by net sales. 
B)  Dividing accounts receivable by net sales and multiplying by 365. 
C)  Dividing net sales by accounts receivable. 
D)  Dividing net sales by accounts receivable and multiplying by 365. 
E)  Multiplying net sales by accounts receivable and dividing by 365. 
A)  Dividing accounts receivable by net sales. 
B)  Dividing accounts receivable by net sales and multiplying by 365. 
C)  Dividing net sales by accounts receivable. 
D)  Dividing net sales by accounts receivable and multiplying by 365. 
E)  Multiplying net sales by accounts receivable and dividing by 365.

Question 11

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

Accepted Answer

A) True 
 B)False

Question 12

The use of electronic communication to transfer cash from one party to another is called ________.

Accepted Answer

electronic

Question 13

Plenty Co.established a petty cash fund of $150 on October 1.On October 10,the petty cash fund was replenished when there was $49 remaining and there were petty cash receipts for: office supplies,$47; transportation-in on inventory purchased,$32; and postage,$22.On October 15,the petty cash fund was decreased to $125 in total.Plenty Co.uses the perpetual inventory system.Record the above transactions in general journal form.

Accepted Answer

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\

Question 14

Preparing a bank reconciliation on a monthly basis is an example of:

Accepted Answer

A)  Establishing responsibility. 
B)  Separation of duties. 
C)  Protecting assets by proving the accuracy of cash records. 
D)  A technological control. 
E)  Poor internal control. 
A)  Establishing responsibility. 
B)  Separation of duties. 
C)  Protecting assets by proving the accuracy of cash records. 
D)  A technological control. 
E)  Poor internal control.

Question 15

A petty cash fund was originally established with a check for $100.On August 31,which is the period end,the petty cash fund included the following:
 $$\begin{array} { | l | r | } 
\hline \text { Petty cash receipts: } & \
\hline \text { Postage } & \$ 43.50 \
\hline \text { Office supplies } & 11.85 \
\hline \text { Office equipment repair } & 39.00 \
\hline \text { Cash } & 4.25 \
\hline
\end{array}$$ 
Prepare the general journal entry to record the replenishment of the petty cash fund on August 31.

Accepted Answer

None

Question 16

On August 25,Barrymore Co.purchased $5,000 worth of merchandise on terms 2/10,n/30; on September 4,the amount due was paid.Using the net method of recording purchases,prepare general journal entries to record (a)the purchase on August 25,and (b)the cash payment on September 4.

Accepted Answer

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\

Question 17

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

Accepted Answer

A) True 
 B)False

Question 18

The use of internal controls provides a guarantee against losses due to operating activities.

Accepted Answer

A) True 
 B)False

Question 19

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

Accepted Answer

A)  Deduct the deposit from the bank statement balance. 
B)  Send the bank a debit memorandum. 
C)  Deduct the deposit from the September 30 book balance and add it to the October 1 book balance. 
D)  Add the deposit to the book balance of cash. 
E)  Add the deposit to the bank statement balance. 
A)  Deduct the deposit from the bank statement balance. 
B)  Send the bank a debit memorandum. 
C)  Deduct the deposit from the September 30 book balance and add it to the October 1 book balance. 
D)  Add the deposit to the book balance of cash. 
E)  Add the deposit to the bank statement balance.

Question 20

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

Accepted Answer

A)  Subtract $45 from the bank's balance. 
B)  Add $45 to the bank's balance. 
C)  Subtract $45 from the book balance. 
D)  Add $45 to the book balance. 
E)  Subtract $45 from the bank's balance and add $45 to the book's balance. 
A)  Subtract $45 from the bank's balance. 
B)  Add $45 to the bank's balance. 
C)  Subtract $45 from the book balance. 
D)  Add $45 to the book balance. 
E)  Subtract $45 from the bank's balance and add $45 to the book's balance.

The Petty Cash account is a separate bank account used for small amounts.

Match each of the following terms with the appropriate definitions. -A method of initially recording purchases at the invoice price less any purchase discounts offered by the seller.

Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control.

Two limitations of internal control systems are and .

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

An internal control system consists of the policies and procedures companies use to protect assets,ensure reliable accounting,promote efficient operations,and uphold company policies.

An ________ refers to the policies and procedures managers use to protect assets,ensure reliable accounting,promote efficient operations,and urge adherence to company policies.

The number of days' sales uncollected is calculated by:

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

The use of electronic communication to transfer cash from one party to another is called ________.

Preparing a bank reconciliation on a monthly basis is an example of:

On August 25,Barrymore Co.purchased $5,000 worth of merchandise on terms 2/10,n/30; on September 4,the amount due was paid.Using the net method of recording purchases,prepare general journal entries to record (a)the purchase on August 25,and (b)the cash payment on September 4.

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

The use of internal controls provides a guarantee against losses due to operating activities.

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 6: Cash, fraud, and Internal Controls

The Petty Cash account is a separate bank account used for small amounts.

Match each of the following terms with the appropriate definitions. -A method of initially recording purchases at the invoice price less any purchase discounts offered by the seller.

Clearly establishing responsibilities and assigning all accounting activities to one person is an important principle of internal control.

Two limitations of internal control systems are ________ and ________.

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

An internal control system consists of the policies and procedures companies use to protect assets,ensure reliable accounting,promote efficient operations,and uphold company policies.

An ________ refers to the policies and procedures managers use to protect assets,ensure reliable accounting,promote efficient operations,and urge adherence to company policies.

The number of days' sales uncollected is calculated by:

After preparing a bank reconciliation,adjustments must be made for items reconciling the book balance.

The use of electronic communication to transfer cash from one party to another is called ________.

Preparing a bank reconciliation on a monthly basis is an example of:

On August 25,Barrymore Co.purchased $5,000 worth of merchandise on terms 2/10,n/30; on September 4,the amount due was paid.Using the net method of recording purchases,prepare general journal entries to record (a)the purchase on August 25,and (b)the cash payment on September 4.

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

The use of internal controls provides a guarantee against losses due to operating activities.

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227,how should this error be treated on the bank reconciliation?

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Investments

Partnership Accounting

Filters

Two limitations of internal control systems are and .