Question 1

Good internal control dictates that a person who controls an asset also maintains that asset's accounting records.

Accepted Answer

A) True 
 B)False

Question 2

A purchase requisition is a document the purchasing department sends to the vendor to place an order.

Accepted Answer

A) True 
 B)False

Question 3

A ________ is an internal document (or file) that is used to accumulate information to control cash disbursements.

Accepted Answer

The answer of A ________ is an internal document (or...

Question 4

List the principles of internal control.

Accepted Answer

Principles of internal control include t

Question 5

When two clerks share the same cash register it is a violation of which internal control principle?

Accepted Answer

A)  Establish responsibilities. 
B)  Maintain adequate records. 
C)  Insure assets. 
D)  Bond key employees. 
E)  Apply technological controls. 
A)  Establish responsibilities. 
B)  Maintain adequate records. 
C)  Insure assets. 
D)  Bond key employees. 
E)  Apply technological controls.

Question 6

On August 17, at the end of the day, the cash register's record shows $957, but the count of cash in the register is $965. Prepare the general journal entry to record the day's cash sales.

Accepted Answer

The answer of On August 17, at the end of...

Question 7

Principles of internal control include all of the following except:

Accepted Answer

A)  Apply technological controls. 
B)  Maintain minimal assets. 
C)  Perform regular and independent reviews. 
D)  Separate recordkeeping from custody of assets. 
E)  Divide responsibilities for related transactions. 
A)  Apply technological controls. 
B)  Maintain minimal assets. 
C)  Perform regular and independent reviews. 
D)  Separate recordkeeping from custody of assets. 
E)  Divide responsibilities for related transactions.

Question 8

An expense resulting from failing to take advantage of cash discounts on purchases is called:

Accepted Answer

A)  Sales discounts. 
B)  Trade discounts. 
C)  Purchases discounts. 
D)  Discounts lost. 
E)  Discounts earned. 
A)  Sales discounts. 
B)  Trade discounts. 
C)  Purchases discounts. 
D)  Discounts lost. 
E)  Discounts earned.

Question 9

When a petty cash fund is in use:

Accepted Answer

A)  Expenses paid with petty cash are recorded when the fund is replenished. 
B)  Petty Cash is debited when funds are replenished. 
C)  Petty Cash is credited when funds are replenished. 
D)  Expenses are not recorded. 
E)  Cash is debited when funds are replenished. 
A)  Expenses paid with petty cash are recorded when the fund is replenished. 
B)  Petty Cash is debited when funds are replenished. 
C)  Petty Cash is credited when funds are replenished. 
D)  Expenses are not recorded. 
E)  Cash is debited when funds are replenished.

Question 10

The Petty Cash account is a separate checking account used for small amounts.

Accepted Answer

A) True 
 B)False

Question 11

It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash.

Accepted Answer

A) True 
 B)False

Question 12

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

The answer of _______________________ are deposits made and recorded by...

Question 13

Two limitations of internal control systems are ____________________ and _______________.

Accepted Answer

Human error or human

Question 14

The principles of internal control include:

Accepted Answer

A)  Establish responsibilities. 
B)  Maintain minimal records. 
C)  Use only computerized systems. 
D)  Bond all employees. 
E)  Require automated sales systems. 
A)  Establish responsibilities. 
B)  Maintain minimal records. 
C)  Use only computerized systems. 
D)  Bond all employees. 
E)  Require automated sales systems.

Question 15

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

Accepted Answer

A)  After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent. 
B)  The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C)  For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank. 
D)  The cashier should not also be the record keeper who records the amounts received in the accounting records. 
E)  All of these are good internal control procedures over cash receipts that arrive through the mail. 
A)  After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent. 
B)  The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C)  For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank. 
D)  The cashier should not also be the record keeper who records the amounts received in the accounting records. 
E)  All of these are good internal control procedures over cash receipts that arrive through the mail.

Question 16

If the Cash Over and Short account has a debit balance at the end of the period, the amount is reported as miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 17

The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

Accepted Answer

The answer of The _________________ account is used to record...

Question 18

A company had the following transactions during October:   Using the net method of recording purchases, prepare the journal entries to record these October transactions.

Accepted Answer

The answer of A company had the following transactions during...

Question 19

The payee is the person who signs a check, authorizing its payment.

Accepted Answer

A) True 
 B)False

Question 20

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks, deposits, and bank service charges.

Accepted Answer

A) True 
 B)False

Exam 8: Cash and Internal Controls

Good internal control dictates that a person who controls an asset also maintains that asset's accounting records.

A purchase requisition is a document the purchasing department sends to the vendor to place an order.

A ________ is an internal document (or file) that is used to accumulate information to control cash disbursements.

List the principles of internal control.

When two clerks share the same cash register it is a violation of which internal control principle?

On August 17, at the end of the day, the cash register's record shows $957, but the count of cash in the register is $965. Prepare the general journal entry to record the day's cash sales.

Principles of internal control include all of the following except:

An expense resulting from failing to take advantage of cash discounts on purchases is called:

When a petty cash fund is in use:

The Petty Cash account is a separate checking account used for small amounts.

It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash.

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Two limitations of internal control systems are ____________________ and _______________.

The principles of internal control include:

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

If the Cash Over and Short account has a debit balance at the end of the period, the amount is reported as miscellaneous revenue.

The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

A company had the following transactions during October: Using the net method of recording purchases, prepare the journal entries to record these October transactions.

The payee is the person who signs a check, authorizing its payment.

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks, deposits, and bank service charges.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

Filters

Two limitations of internal control systems are ______ and _.