Question 1

A bank statement included a NSF check from customer Kim Fields for $2,100.The journal entry to record this reconciling item should:

Accepted Answer

A) debit NSF and credit Cash for $2,100. 
B) debit Cash and credit Accounts Receivable for $2,100. 
C) debit Accounts Receivable and credit Cash for $2,100. 
D) debit Cash and credit NSF for $2,100. 
A) debit NSF and credit Cash for $2,100. 
B) debit Cash and credit Accounts Receivable for $2,100. 
C) debit Accounts Receivable and credit Cash for $2,100. 
D) debit Cash and credit NSF for $2,100.

Question 2

The person to whom a check is paid is referred to as the maker.

Accepted Answer

A) True 
 B)False

Question 3

Managers can use records produced by point-of-sale terminals to check inventory levels.

Accepted Answer

A) True 
 B)False

Question 4

There are three parties to a check.The person who signs the check is the:

Accepted Answer

A) maker. 
B) payee. 
C) draftee. 
D) promisee. 
A) maker. 
B) payee. 
C) draftee. 
D) promisee.

Question 5

The components of internal control do NOT include:

Accepted Answer

A) control environment. 
B) risk assessment. 
C) control procedures. 
D) safeguard assets. 
A) control environment. 
B) risk assessment. 
C) control procedures. 
D) safeguard assets.

Question 6

Debit cards cannot be used to make purchases of relatively small amounts because of the high risk of fraud.

Accepted Answer

A) True 
 B)False

Question 7

The company should split duties of purchasing goods,receiving goods,preparing payment,and approving payment.

Accepted Answer

A) True 
 B)False

Question 8

The ending bank statement balance at November 30 is $7,070.The bank statement shows a service charge of $95,electronic funds receipts of $800 and a NSF check for $350.Deposits in transit total $2,050 and outstanding checks are $1,835.The balance per books at November 30 is $6,930.What is the adjusted book balance at November 30?

Accepted Answer

A) $7,425 
B) $7,145 
C) $7,285 
D) $8,675 
A) $7,425 
B) $7,145 
C) $7,285 
D) $8,675

Question 9

Debit cards are being used:

Accepted Answer

A) in place of petty cash funds. 
B) for small purchases. 
C) for package delivery fees. 
D) all of the above. 
A) in place of petty cash funds. 
B) for small purchases. 
C) for package delivery fees. 
D) all of the above.

Question 10

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

Accepted Answer

A) True 
 B)False

Question 11

An employee claims that he overstated expense reimbursement requests to have extra money for his wife and children because "Everyone is doing it." This is an example of:

Accepted Answer

A) opportunity. 
B) motive. 
C) rationalization. 
D) understanding. 
A) opportunity. 
B) motive. 
C) rationalization. 
D) understanding.

Question 12

In order to maximize profits,a proper system of internal controls provides clear policies that result in fair treatment that applies to customers only.

Accepted Answer

A) True 
 B)False

Question 13

________ is the most common fraud,but ________ is the most expensive fraud.

Accepted Answer

A) Fraudulent financial reporting;misappropriation of assets 
B) Misappropriation of assets;fraudulent financial reporting 
C) Misappropriation of assets;cooking the books 
D) Cooking the books;misappropriation of assets 
A) Fraudulent financial reporting;misappropriation of assets 
B) Misappropriation of assets;fraudulent financial reporting 
C) Misappropriation of assets;cooking the books 
D) Cooking the books;misappropriation of assets

Question 14

If the bank records a deposit of $130 as $1,300,the error should be shown on a bank reconciliation as a:

Accepted Answer

A) subtraction from the book balance of $1,430. 
B) subtraction from the bank balance of $1,430. 
C) subtraction from the bank balance of $1,170. 
D) subtraction from the book balance of $1,170. 
A) subtraction from the book balance of $1,430. 
B) subtraction from the bank balance of $1,430. 
C) subtraction from the bank balance of $1,170. 
D) subtraction from the book balance of $1,170.

Question 15

An imprest petty cash fund of $600 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$48 for postage,$83 for fuel and a delivery charge of $65.How much cash should left in the fund?

Accepted Answer

A) $219 
B) $284 
C) $367 
D) $415 
A) $219 
B) $284 
C) $367 
D) $415

Question 16

New Store has the following information at August 31:   What is the adjusted bank balance at August 31?

Accepted Answer

A) $13,710 
B) $16,021 
C) $14,444 
D) $16,660 
A) $13,710 
B) $16,021 
C) $14,444 
D) $16,660

Question 17

A receiving report informs a vendor of the amount of goods received by the purchaser.

Accepted Answer

A) True 
 B)False

Question 18

A petty cash fund:

Accepted Answer

A) is established to pay large nonrecurring expenses. 
B) is established to pay for minor purchases. 
C) should have a least two custodians. 
D) should issue checks for certain purchases. 
A) is established to pay large nonrecurring expenses. 
B) is established to pay for minor purchases. 
C) should have a least two custodians. 
D) should issue checks for certain purchases.

Question 19

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

Accepted Answer

A) debit to Cash for $200 and a credit to Interest Revenue for $200. 
B) debit to Accounts Receivable for $200 and a credit to Interest Revenue for $200. 
C) debit to Interest Revenue for $200 and credit to Cash for $200. 
D) debit to Interest Expense for $200 and credit to Prepaid Interest for $200. 
A) debit to Cash for $200 and a credit to Interest Revenue for $200. 
B) debit to Accounts Receivable for $200 and a credit to Interest Revenue for $200. 
C) debit to Interest Revenue for $200 and credit to Cash for $200. 
D) debit to Interest Expense for $200 and credit to Prepaid Interest for $200.

Question 20

The person who prepares the bank reconciliation:

Accepted Answer

A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties. 
A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties.

A bank statement included a NSF check from customer Kim Fields for $2,100.The journal entry to record this reconciling item should:

The person to whom a check is paid is referred to as the maker.

Managers can use records produced by point-of-sale terminals to check inventory levels.

There are three parties to a check.The person who signs the check is the:

The components of internal control do NOT include:

Debit cards cannot be used to make purchases of relatively small amounts because of the high risk of fraud.

The company should split duties of purchasing goods,receiving goods,preparing payment,and approving payment.

Debit cards are being used:

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

An employee claims that he overstated expense reimbursement requests to have extra money for his wife and children because "Everyone is doing it." This is an example of:

In order to maximize profits,a proper system of internal controls provides clear policies that result in fair treatment that applies to customers only.

is the most common fraud,but is the most expensive fraud.

If the bank records a deposit of $130 as $1,300,the error should be shown on a bank reconciliation as a:

An imprest petty cash fund of $600 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$48 for postage,$83 for fuel and a delivery charge of $65.How much cash should left in the fund?

New Store has the following information at August 31: What is the adjusted bank balance at August 31?

A receiving report informs a vendor of the amount of goods received by the purchaser.

A petty cash fund:

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

The person who prepares the bank reconciliation:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 4: Internal Control Cash

A bank statement included a NSF check from customer Kim Fields for $2,100.The journal entry to record this reconciling item should:

The person to whom a check is paid is referred to as the maker.

Managers can use records produced by point-of-sale terminals to check inventory levels.

There are three parties to a check.The person who signs the check is the:

The components of internal control do NOT include:

Debit cards cannot be used to make purchases of relatively small amounts because of the high risk of fraud.

The company should split duties of purchasing goods,receiving goods,preparing payment,and approving payment.

Debit cards are being used:

The primary way that fraud and unintentional errors in financial statements are prevented is by external auditors.

An employee claims that he overstated expense reimbursement requests to have extra money for his wife and children because "Everyone is doing it." This is an example of:

In order to maximize profits,a proper system of internal controls provides clear policies that result in fair treatment that applies to customers only.

________ is the most common fraud,but ________ is the most expensive fraud.

If the bank records a deposit of $130 as $1,300,the error should be shown on a bank reconciliation as a:

An imprest petty cash fund of $600 was established for minor disbursements.At the end of the month the fund included petty cash tickets for the purchase of $185 in supplies,$48 for postage,$83 for fuel and a delivery charge of $65.How much cash should left in the fund?

New Store has the following information at August 31: What is the adjusted bank balance at August 31?

A receiving report informs a vendor of the amount of goods received by the purchaser.

A petty cash fund:

If a bank statement includes an EFT receipt of $200 for interest,the journal entry to record this reconciling item should include a:

The person who prepares the bank reconciliation:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

is the most common fraud,but is the most expensive fraud.