Question 1

During a bank reconciliation process,

Accepted Answer

A)  Outstanding checks and deposits in transit are added to the bank statement balance. 
B)  Outstanding checks are subtracted and deposits in transit are added to the bank statement balance. 
C)  Outstanding checks and deposits in transit are subtracted from the bank statement balance. 
D)  Outstanding checks are added and deposits in transit are subtracted from the bank statement balance. 
A)  Outstanding checks and deposits in transit are added to the bank statement balance. 
B)  Outstanding checks are subtracted and deposits in transit are added to the bank statement balance. 
C)  Outstanding checks and deposits in transit are subtracted from the bank statement balance. 
D)  Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.

Question 2

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

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 3

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures.
1. Mandatory vacations
2. Personnel policies
3. Report of outside consultants on future market changes

Accepted Answer

1. (c) control proce

Question 4

The bank reconciliation

Accepted Answer

A)  should be prepared by an employee who records cash transactions 
B)  is part of the internal control system 
C)  is for information purposes only 
D)  is sent to the bank for verification 
A)  should be prepared by an employee who records cash transactions 
B)  is part of the internal control system 
C)  is for information purposes only 
D)  is sent to the bank for verification

Question 5

Which of the following is not an internal control activity for cash?

Accepted Answer

A)  The number of persons who have access to cash should be limited. 
B)  All cash receipts should be recorded promptly. 
C)  The functions of record keeping and maintaining custody of cash should be combined. 
D)  Surprise audits of cash on hand should be made occasionally. 
A)  The number of persons who have access to cash should be limited. 
B)  All cash receipts should be recorded promptly. 
C)  The functions of record keeping and maintaining custody of cash should be combined. 
D)  Surprise audits of cash on hand should be made occasionally.

Question 6

List the principal advantage of Electronic Funds Transfers.

Accepted Answer

Advantage: more effi

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

Accepted Answer

A)  risk assessment 
B)  monitoring 
C)  proofs and security measures 
D)  separating responsibilities for related operations 
A)  risk assessment 
B)  monitoring 
C)  proofs and security measures 
D)  separating responsibilities for related operations

Question 9

List and define each of the five elements of internal control.

Accepted Answer

The answer of List and define each of the five...

Question 10

The following data were gathered to use in reconciling the bank account of Savannah Company:  What is the adjusted balance on the bank reconcilition?

Accepted Answer

A)  $14,470 
B)  $10,705 
C)  $15,095 
D)  $15,720 
A)  $14,470 
B)  $10,705 
C)  $15,095 
D)  $15,720

Question 11

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

Accepted Answer

The answer of You are trying to explain debit and...

Question 12

An example of a preventive control is

Accepted Answer

A)  a single person handles the responsibilities for operations, custody of assets, and accounting 
B)  separation of the Purchasing Department and Accounting Department personnel 
C)  bonding employees who handle cash 
D)  accepting payment in currency only 
A)  a single person handles the responsibilities for operations, custody of assets, and accounting 
B)  separation of the Purchasing Department and Accounting Department personnel 
C)  bonding employees who handle cash 
D)  accepting payment in currency only

Question 13

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

Accepted Answer

A)  invoice 
B)  voucher 
C)  debit memo 
D)  remittance advice 
A)  invoice 
B)  voucher 
C)  debit memo 
D)  remittance advice

Question 14

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Accepted Answer

A) True 
 B)False

Question 15

On the bank's accounting records, customers' accounts are normally shown as

Accepted Answer

A)  debit balances 
B)  expenses 
C)  an asset 
D)  a liability 
A)  debit balances 
B)  expenses 
C)  an asset 
D)  a liability

Question 16

An element of internal control is

Accepted Answer

A)  risk assessment 
B)  journals 
C)  subsidiary ledgers 
D)  controlling accounts 
A)  risk assessment 
B)  journals 
C)  subsidiary ledgers 
D)  controlling accounts

Question 17

Journal entries based on the bank reconciliation are required in the company's accounts for

Accepted Answer

A)  outstanding checks 
B)  deposits in transit 
C)  bank errors 
D)  book errors 
A)  outstanding checks 
B)  deposits in transit 
C)  bank errors 
D)  book errors

Question 18

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 19

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:
   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

Office Supplies 295
Advertisin

Question 20

The following data were gathered to use in reconciling the bank statement of Build-A-Lot:
   Required:
(1) What is the adjusted balance on the bank reconciliation?
(2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Accepted Answer

(1)
$13,155 as shown below.
Ba

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

During a bank reconciliation process,

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

The bank reconciliation

Which of the following is not an internal control activity for cash?

List the principal advantage of Electronic Funds Transfers.

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

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

List and define each of the five elements of internal control.

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance. Complete the following table to help your new staff understand.

An example of a preventive control is

A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n)

When the voucher system is used, the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

On the bank's accounting records, customers' accounts are normally shown as

An element of internal control is

Journal entries based on the bank reconciliation are required in the company's accounts for

In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Filters