Question 1

The amount of cash to be reported on the balance sheet at June 30 is the

Accepted Answer

A)  total of the cash column in the cash receipts journal as of June 30 
B)  adjusted balance appearing in the bank reconciliation for June 30 
C)  total of the cash column in the cash payments journal as of June 30 
D)  balance as of June 30 on the bank statement 
A)  total of the cash column in the cash receipts journal as of June 30 
B)  adjusted balance appearing in the bank reconciliation for June 30 
C)  total of the cash column in the cash payments journal as of June 30 
D)  balance as of June 30 on the bank statement

Question 2

A payment system that uses computerized electronic impulses to effect a cash transaction is called electronic funds transfer (EFT).

Accepted Answer

A) True 
 B)False

Question 3

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. What entry is required in the company's accounts?

Accepted Answer

A)  debit Sales; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Sales 
D)  debit Accounts Receivable; credit Cash 
A)  debit Sales; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Sales 
D)  debit Accounts Receivable; credit Cash

Question 4

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

Accepted Answer

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

Question 5

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 6

A voucher is a written authorization to make a cash payment.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

There are two internal control objectives and they are to ensure accurate financial reports, and ensure compliance with applicable laws.

Accepted Answer

A) True 
 B)False

Question 10

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 11

The reconciliation of the cash register tape with the cash in the register is an example of

Accepted Answer

A)  other controls. 
B)  independent internal verification. 
C)  establishment of responsibility. 
D)  segregation of duties. 
A)  other controls. 
B)  independent internal verification. 
C)  establishment of responsibility. 
D)  segregation of duties.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Question 14

A firm's internal control environment is not influenced by

Accepted Answer

A)  management's operating style 
B)  organizational structure 
C)  personnel policies 
D)  monitoring policies 
A)  management's operating style 
B)  organizational structure 
C)  personnel policies 
D)  monitoring policies

Question 15

On April 3rd, Snappy Sales decides to establish a $135.00 Petty Cash Account to relieve the burden on Accounting.
(a) Journalize this event.
(b) On April 11th, the petty cash fund has receipts for mail and postage of $32.75, contributions and donations of $25.25, meals and entertainment of $68.00 and $9.75 in cash. Journalize the replenishment of the fund.
(c) On April 12th, Snappy Sales decides to increase petty cash to $175.00. Journalize this event.

Accepted Answer

The answer of On April 3rd, Snappy Sales decides to...

Question 16

A bank reconciliation should be prepared

Accepted Answer

A)  whenever the bank refuses to lend the company money. 
B)  to explain any difference between the company's balance per books with the balance per bank. 
C)  by the company's bank. 
D)  by the person who is authorized to sign checks. 
A)  whenever the bank refuses to lend the company money. 
B)  to explain any difference between the company's balance per books with the balance per bank. 
C)  by the company's bank. 
D)  by the person who is authorized to sign checks.

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

The amount of cash to be reported on the balance sheet at June 30 is the

A payment system that uses computerized electronic impulses to effect a cash transaction is called electronic funds transfer (EFT).

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. What entry is required in the company's accounts?

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

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.

A voucher is a written authorization to make a cash payment.

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

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

There are two internal control objectives and they are to ensure accurate financial reports, and ensure compliance with applicable laws.

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

The reconciliation of the cash register tape with the cash in the register is an example of

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

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

A firm's internal control environment is not influenced by

A bank reconciliation should be prepared

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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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