Question 1

The amount of the outstanding checks is 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 2

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

Accepted Answer

A) True 
 B)False

Question 3

The term cash includes

Accepted Answer

A)  coins, currency (paper money), checks 
B)  money orders, and money on deposit that is available for unrestricted withdrawal 
C)  short-term receivables 
D)  both a and b 
A)  coins, currency (paper money), checks 
B)  money orders, and money on deposit that is available for unrestricted withdrawal 
C)  short-term receivables 
D)  both a and b

Question 4

You began your new job as the accountant at Bolivar Industries during the month of December. During your first month, you found several interesting issues.
1) While looking through the invoices, you found Invoices 213-242, 245-271, and 275-290. It appears that invoices 243, 244, 272, 273, and 274 are missing.
2) During the month, Clerk # 3 issued $250 in refunds as compared to Clerks #1, #2, and #4 who issued less than $50 each.
3) The daily cash receipts and bank deposits reconcile, except on Tuesdays during the month.
4) Business is generally brisk during the holiday season, but two weeks before Christmas there was a sudden increase in slow payments.
REQUIRED:
Part A: What kind of warning signs could be associated with these issues?
Part B: What control could you put in place regarding cash refunds mentioned in Part A (2)?

Accepted Answer

Part A:
1) Missing invoices or gaps in t

Question 5

A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

Accepted Answer

A)  credit to Petty Cash for $110. 
B)  debit to Cash for $110. 
C)  credit to Cash Over and Short for $3. 
D)  credit to Cash for $82. 
A)  credit to Petty Cash for $110. 
B)  debit to Cash for $110. 
C)  credit to Cash Over and Short for $3. 
D)  credit to Cash for $82.

Question 6

Roper Electronics received its bank statement for the month of August with an ending balance of $11,740.00. Roper determined that check #613 for $155.00 and check #601 for $420.00 were both outstanding. Also, a $6,900.00 deposit for August 30th was in transit as of the end of the month. Northern Regional Bank also collected a $5,000.00 notes receivable on August 1st that was issued March 1st at 12% annual interest. No interest revenue has been accrued on this note and Northern Regional Bank charged a $35.00 fee for the collection service.The bank statement reveals a bank service charge of $20.00. A customer check for $68.00 was returned with the bank statement marked "NSF". The ending balance of the Roper cash account is $12,938.00.
Complete a bank/account reconciliation and prepare any necessary journal entries for the reconciliation.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 7

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 8

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Accepted Answer

A) True 
 B)False

Question 9

Sarbanes-Oxley's purpose is to improve financial reporting.

Accepted Answer

A) True 
 B)False

Question 10

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

Accepted Answer

A) True 
 B)False

Question 11

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Accepted Answer

A)  an expense on the income statement 
B)  income on the income statement 
C)  an asset on the balance sheet 
D)  a liability on the balance sheet 
A)  an expense on the income statement 
B)  income on the income statement 
C)  an asset on the balance sheet 
D)  a liability on the balance sheet

Question 12

Bank reconciliation information for Cole Co. for May 31, 2011 is as follows:
   Record the appropriate journal entry for Cole Co.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 13

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 14

There are three parties to a check. The drawer is

Accepted Answer

A)  a written document signed by the company 
B)  is the one who signs the check ordering payment by the bank 
C)  the bank on which the check is drawn 
D)  the party to whom payment is to be made 
A)  a written document signed by the company 
B)  is the one who signs the check ordering payment by the bank 
C)  the bank on which the check is drawn 
D)  the party to whom payment is to be made

Question 15

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

$15,095 ($16,750 + $

Question 16

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

Accepted Answer

A)  deposited checks returned for insufficient funds 
B)  a promissory note left for collection 
C)  a service charge 
D)  notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket 
A)  deposited checks returned for insufficient funds 
B)  a promissory note left for collection 
C)  a service charge 
D)  notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

Question 17

If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other income" item on the income statement.

Accepted Answer

A) True 
 B)False

Question 18

Match between columns
                        Premises: Personnel policies
Report of outside consultants on future market changes
Mandatory vacations

Accepted Answer

The Answer of the control environment and risk assessment and is...

Question 19

Why would a bank require a company to maintain a compensating balance?

Accepted Answer

Usually a compensati

Question 20

What entry is required in the company's accounts to record outstanding checks?

Accepted Answer

A)  debit Accounts Receivable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  none 
A)  debit Accounts Receivable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  none

The amount of the outstanding checks is included on the bank reconciliation as a(n)

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

The term cash includes

A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

An element of internal control is

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Sarbanes-Oxley's purpose is to improve financial reporting.

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Bank reconciliation information for Cole Co. for May 31, 2011 is as follows: Record the appropriate journal entry for Cole Co.

Cash equivalents include

There are three parties to a check. The drawer is

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

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other income" item on the income statement.

Why would a bank require a company to maintain a compensating balance?

What entry is required in the company's accounts to record outstanding checks?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

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

Exam 8: Sarbanes-Oxley, Internal Control, and Cash

The amount of the outstanding checks is included on the bank reconciliation as a(n)

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

The term cash includes

A $135 petty cash fund has cash of $28 and receipts of $110. The journal entry to replenish the account would include a

An element of internal control is

An example of good internal controls over cash payments is the taking of all cash discounts offered.

Sarbanes-Oxley's purpose is to improve financial reporting.

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Bank reconciliation information for Cole Co. for May 31, 2011 is as follows: Record the appropriate journal entry for Cole Co.

Cash equivalents include

There are three parties to a check. The drawer is

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

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo is

If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other income" item on the income statement.

Why would a bank require a company to maintain a compensating balance?

What entry is required in the company's accounts to record outstanding checks?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

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