Question 1

Money orders are considered cash.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Internal controls are important because they

Accepted Answer

A) prevent fraud and misleading financial statements. 
B) eliminate fraud. 
C) deter fraud and prevent theft and other abuses. 
D) guarantee accurate financial statements. 
A) prevent fraud and misleading financial statements. 
B) eliminate fraud. 
C) deter fraud and prevent theft and other abuses. 
D) guarantee accurate financial statements.

Question 4

Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500.This item would be included on the bank reconciliation as a(n)

Accepted Answer

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

Question 5

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

Accepted Answer

A) True 
 B)False

Question 6

A business that requires that all cash payments be made by check CANNOT use a petty
cash system.

Accepted Answer

A) True 
 B)False

Question 7

List the objectives of internal control and give an example of how each is implemented.

Accepted Answer

Internal control provides reas

Question 8

The purpose of the Sarbanes-Oxley Act of 2002 is to

Accepted Answer

A) restore public confidence and trust in the financial statements of publicly held companies. 
B) require all companies to prepare financial statements. 
C) protect companies from demands of investors,stockholders,and creditors. 
D) do all of these. 
A) restore public confidence and trust in the financial statements of publicly held companies. 
B) require all companies to prepare financial statements. 
C) protect companies from demands of investors,stockholders,and creditors. 
D) do all of these.

Question 9

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 10

A check drawn by a depositor for $810 in payment of a liability was recorded by the depositor as $180.This item would be included on the bank reconciliation as a(n)

Accepted Answer

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

Question 11

A special cash fund used to make small payments that occur frequently is called a(n)

Accepted Answer

A) operating expenses fund. 
B) change fund. 
C) market fund. 
D) petty cash fund. 
A) operating expenses fund. 
B) change fund. 
C) market fund. 
D) petty cash fund.

Question 12

A voucher

Accepted Answer

A) is received from customers to explain the purpose of a payment. 
B) is normally prepared in the Accounting Department. 
C) system is used to control cash receipts. 
D) system is an internal control procedure to verify that the assets in the records are the ones the company owns. 
A) is received from customers to explain the purpose of a payment. 
B) is normally prepared in the Accounting Department. 
C) system is used to control cash receipts. 
D) system is an internal control procedure to verify that the assets in the records are the ones the company owns.

Question 13

Information and communication are essential elements of an organization's internal control.

Accepted Answer

A) True 
 B)False

Question 14

Cash equivalents include

Accepted Answer

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

Question 15

In preparing a bank reconciliation,the amount of outstanding checks is added to the balance per depositor's statement.

Accepted Answer

A) True 
 B)False

Question 16

Bank customers are considered owners of the bank so the bank shows their accounts as an asset on the bank's records.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A special-purpose cash fund is

Question 18

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositor's records.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Separating the custody of assets from accounting for assets is a part of which element of internal control?

Accepted Answer

A) Information and communication 
B) Monitoring 
C) The control environment 
D) Control procedures 
A) Information and communication 
B) Monitoring 
C) The control environment 
D) Control procedures

Money orders are considered cash.

A credit memorandum from the bank

Internal controls are important because they

Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500.This item would be included on the bank reconciliation as a(n)

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

A business that requires that all cash payments be made by check CANNOT use a petty cash system.

List the objectives of internal control and give an example of how each is implemented.

The purpose of the Sarbanes-Oxley Act of 2002 is to

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?

A check drawn by a depositor for $810 in payment of a liability was recorded by the depositor as $180.This item would be included on the bank reconciliation as a(n)

A special cash fund used to make small payments that occur frequently is called a(n)

A voucher

Information and communication are essential elements of an organization's internal control.

Cash equivalents include

In preparing a bank reconciliation,the amount of outstanding checks is added to the balance per depositor's statement.

Bank customers are considered owners of the bank so the bank shows their accounts as an asset on the bank's records.

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

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositor's records.

Which of the following reflects a weak internal control system?

Separating the custody of assets from accounting for assets is a part of which element of internal control?

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

Money orders are considered cash.

A credit memorandum from the bank

Internal controls are important because they

Receipts from cash sales of $5,700 were recorded incorrectly by the depositor as $7,500.This item would be included on the bank reconciliation as a(n)

Depositing all cash,checks,etc.in a bank and paying with checks is an internal control procedure over cash.

A business that requires that all cash payments be made by check CANNOT use a petty cash system.

List the objectives of internal control and give an example of how each is implemented.

The purpose of the Sarbanes-Oxley Act of 2002 is to

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?

A check drawn by a depositor for $810 in payment of a liability was recorded by the depositor as $180.This item would be included on the bank reconciliation as a(n)

A special cash fund used to make small payments that occur frequently is called a(n)

A voucher

Information and communication are essential elements of an organization's internal control.

Cash equivalents include

In preparing a bank reconciliation,the amount of outstanding checks is added to the balance per depositor's statement.

Bank customers are considered owners of the bank so the bank shows their accounts as an asset on the bank's records.

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

In preparing a bank reconciliation,the amount indicated by a credit memorandum for a note receivable collected by the bank is added to the balance per depositor's records.

Which of the following reflects a weak internal control system?

Separating the custody of assets from accounting for assets is a part of which element of internal control?

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