Question 1

Cash equivalents are short -term investments that will be converted to cash within 120 days.

Accepted Answer

A) True 
 B)False

Question 2

Groceries R Us, Inc. reported the following date in it's December 31, 2011 annual report.
Cash and cash equivalents $2,280,000
Cash flow from operations (240,000)
(1) What is the company's "cash burn" per month?
(2) What is the company's ratio of cash to monthly cash expenses?
(3) Interpret the ratio you computed in part 2. What are the implications for Groceries R Us, Inc.?

Accepted Answer

1) $240,000/12 = $20,000 per month
2) $2

Question 3

The following procedures were recently implemented at the Health Station, Inc. For each procedure, indicate whether the internal control over cash represents (1) a strength or (2) a weakness. If it is a weakness, please explain why.
(a) All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares a listing of the cash receipts and forwards a copy of the list to the accounts receivable clerk for recording in the accounts.
(b) The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer's office for approval.
(c) At the end of each day, all cash receipts are placed in the bank's night depository.
(d) The bank reconciliation is prepared by the cashier, who works under the supervision of the treasurer.

Accepted Answer

a. This is a weakness. The mail clerk sh

Question 4

Which one of the following below is not a factor that influences a business's control environment?

Accepted Answer

A)  management's philosophy and operating style 
B)  organizational structure 
C)  proofs and security measurers 
D)  personnel policies 
A)  management's philosophy and operating style 
B)  organizational structure 
C)  proofs and security measurers 
D)  personnel policies

Question 5

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 ledger 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 ledger are the ones the company owns

Question 6

The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash sales.
Journal

Accepted Answer

Journal
 @#IMG-DLM&_

Question 7

Journalize the entries to record the following:
Jun 1 Established a petty cash fund of $200
Jun 30 The amount of cash in the petty cash fund is now $57. The fund is replenished based on the following receipts: postage, $25; entertainment $100; miscellaneous $20.
Record any discrepancy in the cash short and over account.
Journal

Accepted Answer

Journal
@#IMG-DLM&_T

Question 8

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 9

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

Accepted Answer

A) True 
 B)False

Question 10

Match between columns
                        Premises: Check for $420 incorrectly recorded by the company as $240.
Outstanding checks.
Check for $690 incorrectly recorded by the company as $960.
Deposits in transit.
Bank service charges.
NSF check.

Accepted Answer

The Answer of a deduction from the cash balance according is...

Question 11

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

Accepted Answer

A) True 
 B)False

Question 12

Consider the cash account below. Additional Information: cash disbursements were 80% of collections.
  How much was the Beginning Balance of the Cash Account?

Accepted Answer

A)  $57,200 
B)  $92,300 
C)  $103,350 
D)  $35,100 
A)  $57,200 
B)  $92,300 
C)  $103,350 
D)  $35,100

Question 13

Consider the cash account below.
Additional Information: cash disbursements were 80% of collections.
   How much was the Beginning Balance of the Cash Account?

Accepted Answer

Calculation:
$115,375 X 80% = Disburseme

Question 14

The following items may appear on a bank statement:
   Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format:

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 15

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 16

A business that requires all cash payments be made by check can use a petty cash system.

Accepted Answer

A) True 
 B)False

Question 17

The objectives of internal control are to

Accepted Answer

A)  control the internal organization of the accounting department personnel and equipment 
B)  provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with 
C)  prevent fraud, and promote the social interest of the company 
D)  provide control over "internal-use only" reports and employee internal conduct 
A)  control the internal organization of the accounting department personnel and equipment 
B)  provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with 
C)  prevent fraud, and promote the social interest of the company 
D)  provide control over "internal-use only" reports and employee internal conduct

Question 18

Which of the following should not be considered cash by an accountant?

Accepted Answer

A)  money orders 
B)  bank checking accounts 
C)  postage stamps 
D)  travelers' checks 
A)  money orders 
B)  bank checking accounts 
C)  postage stamps 
D)  travelers' checks

Question 19

The following procedures were recently implemented at the Pampered Pets, Inc. For each procedure, indicate whether the internal control over cash represents (1) a strength or (2) a weakness. If it is a weakness, please explain why.
(a) At the end of the day, cash register clerks are required to use their own funds to make up any cash shortages in their registers.
(b) At the end of the day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with the deposit receipt obtained from the bank.
(c) After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing.
(d) Along with the petty cash expense receipts for postage, office supplies, etc., several post-dated employee checks are in the petty cash fund.

Accepted Answer

a. This is a weakness. Requiring cash re

Question 20

EFT

Accepted Answer

A)  means Efficient Funds Transfer 
B)  can process certain cash transactions at less cost than by using the mail 
C)  makes it easier to document purchase and sale transactions 
D)  means Effective Funds Transfer 
A)  means Efficient Funds Transfer 
B)  can process certain cash transactions at less cost than by using the mail 
C)  makes it easier to document purchase and sale transactions 
D)  means Effective Funds Transfer

Cash equivalents are short -term investments that will be converted to cash within 120 days.

Which one of the following below is not a factor that influences a business's control environment?

A voucher

The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash sales. Journal

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

The following items may appear on a bank statement: Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format:

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

A business that requires all cash payments be made by check can use a petty cash system.

The objectives of internal control are to

Which of the following should not be considered cash by an accountant?

EFT

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

Cash equivalents are short -term investments that will be converted to cash within 120 days.

Which one of the following below is not a factor that influences a business's control environment?

A voucher

The actual cash received during the week ended October 31 for cash sales was $23,447.00 and the amount indicated by the cash register total was $23,457.00. Journalize the entry to record the cash receipts and cash sales. Journal

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

Consider the cash account below. Additional Information: cash disbursements were 80% of collections. How much was the Beginning Balance of the Cash Account?

The following items may appear on a bank statement: Indicate whether the item would appear as debit or credit memo on the bank statement and whether the item would increase or decrease the balance of your account. Use the following format:

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

A business that requires all cash payments be made by check can use a petty cash system.

The objectives of internal control are to

Which of the following should not be considered cash by an accountant?

EFT

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