Question 1

Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

Accepted Answer

Preventive controls are to protect cash

Question 2

Harris Company had checks outstanding totaling $15,400 on its May bank reconciliation. In June, Harris Company issued checks totaling $64,900. The June bank statement shows that $47,600 in checks cleared the bank in June. A check from one of Harris Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Harris Company's June bank reconciliation should be

Accepted Answer

A)  $49,500 
B)  $63,000 
C)  $47,600 
D)  $32,700 
A)  $49,500 
B)  $63,000 
C)  $47,600 
D)  $32,700

Question 3

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

Accepted Answer

A) True 
 B)False

Question 4

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 5

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Accepted Answer

A)  internal auditors 
B)  independent accountants 
C)  Board of Director's audit committee 
D)  Board of Trustees 
A)  internal auditors 
B)  independent accountants 
C)  Board of Director's audit committee 
D)  Board of Trustees

Question 6

Thompson Company developed the following reconciling information in preparing its October bank reconciliation:   Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Accepted Answer

A)  $11,050 
B)  $19,450 
C)  $15,950 
D)  $11,150 
A)  $11,050 
B)  $19,450 
C)  $15,950 
D)  $11,150

Question 7

Present entries to record the following transactions:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB20

Question 8

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 9

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 10

Which one of the following below 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 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 collecting and recording of cash

Question 11

A backlog in recording transactions is an example of a warning sign from the accounting system.

Accepted Answer

A) True 
 B)False

Question 12

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

Accepted Answer

A) True 
 B)False

Question 13

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB20

Question 14

A bank statement

Accepted Answer

A)  is a credit reference letter written by the company's bank. 
B)  lets a company know the financial position of the bank as of a certain date. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity that increased or decreased the company's account balance. 
A)  is a credit reference letter written by the company's bank. 
B)  lets a company know the financial position of the bank as of a certain date. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity that increased or decreased the company's account balance.

Question 15

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change.
   Record the Journal Entries for EACH cash register to determine the cashier's accuracy.
   First item for the student to remember is that EACH cash drawer starts with $100. This must be subtracted from the total cash in drawer to determine the cash over/short amount.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 16

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

Accepted Answer

A)  debit Other Income; credit Cash 
B)  debit Cash; credit Other Income 
C)  debit Cash; credit Accounts Receivable 
D)  debit Accounts Receivable; credit Cash 
A)  debit Other Income; credit Cash 
B)  debit Cash; credit Other Income 
C)  debit Cash; credit Accounts Receivable 
D)  debit Accounts Receivable; credit Cash

Question 17

A necessary element of internal control is

Accepted Answer

A)  database 
B)  systems design 
C)  systems analysis 
D)  information and communication 
A)  database 
B)  systems design 
C)  systems analysis 
D)  information and communication

Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

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

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Present entries to record the following transactions:

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

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.

Which one of the following below reflects a weak internal control system?

A backlog in recording transactions is an example of a warning sign from the accounting system.

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

A bank statement

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

A necessary element of internal control is

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

Distinguish preventive controls from detective controls and give examples of each as they relate to cash.

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

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

In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?

Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.

Present entries to record the following transactions:

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

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.

Which one of the following below reflects a weak internal control system?

A backlog in recording transactions is an example of a warning sign from the accounting system.

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.

A bank statement

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

A necessary element of internal control is

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