Question 1

Which of the following attributes of internal control would be violated if the purchasing department wrote checks to pay accounts payable?

Accepted Answer

A) Adequate design of documents 
B) Sound personnel procedures 
C) Periodic independent verification 
D) Separation of duties 
A) Adequate design of documents 
B) Sound personnel procedures 
C) Periodic independent verification 
D) Separation of duties

Question 2

Cash Short or Over would be debited for a shortage.

Accepted Answer

A) True 
 B)False

Question 3

A formal request for a purchase from a requesting department of a business is known as a purchase order.

Accepted Answer

A) True 
 B)False

Question 4

Using bar codes to take a physical inventory is considered poor accounting practice.

Accepted Answer

A) True 
 B)False

Question 5

Compute the correct amount for each letter in the following table:

Accepted Answer

(a)$8,700 ($6,900 - $1,200 + $

Question 6

The financial statements of nonpublic companies are not required to be audited by an independent CPA.

Accepted Answer

A) True 
 B)False

Question 7

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following documents would not originate with the purchasing company?

Accepted Answer

A) Purchase order 
B) Receiving report 
C) Check 
D) Invoice 
A) Purchase order 
B) Receiving report 
C) Check 
D) Invoice

Question 9

A remittance advice accompanies a check sent to a vendor or the vendor's bank.

Accepted Answer

A) True 
 B)False

Question 10

Under the perpetual inventory system,inventory losses can be identified more easily than under the periodic inventory system.

Accepted Answer

A) True 
 B)False

Question 11

Under the perpetual inventory system,the entry to recognize inventory losses usually contains a

Accepted Answer

A) debit to Cost of Goods Sold. 
B) debit to Merchandise Inventory. 
C) credit to Gross Margin. 
D) credit to Cash. 
A) debit to Cost of Goods Sold. 
B) debit to Merchandise Inventory. 
C) credit to Gross Margin. 
D) credit to Cash.

Question 12

Public companies must have their financial statements audited,but are not required to have their internal control systems audited.

Accepted Answer

A) True 
 B)False

Question 13

The document prepared by a department requesting the company to buy something is called a(n)

Accepted Answer

A) purchase order. 
B) invoice. 
C) receiving report. 
D) purchase requisition. 
A) purchase order. 
B) invoice. 
C) receiving report. 
D) purchase requisition.

Question 14

The bonding of employees is an example of which feature of a good system of internal control?

Accepted Answer

A) Authorization of transactions 
B) Sound personnel policies 
C) Separation of duties 
D) Limited access to assets 
A) Authorization of transactions 
B) Sound personnel policies 
C) Separation of duties 
D) Limited access to assets

Question 15

In addition to keeping the records of a purchase transaction,the accounting department should prepare and mail checks in payment of invoices.

Accepted Answer

A) True 
 B)False

Question 16

An NSF check should appear in which section of the bank reconciliation?

Accepted Answer

A) Deductions from the balance per books 
B) Deductions from the balance per bank 
C) Additions to the balance per books 
D) Additions to the balance per bank 
A) Deductions from the balance per books 
B) Deductions from the balance per bank 
C) Additions to the balance per books 
D) Additions to the balance per bank

Question 17

The petty cash fund of Writer Company was established on May 1 and appeared as follows on May 31:
   (a)Prepare the journal entry on May 1 to establish the fund (omit explanation).
(b)Prepare the journal entry on May 31 to replenish the fund (omit explanation).

Accepted Answer

The answer of The petty cash fund of Writer Company...

Question 18

Jasmine Company has established a petty cash fund for small expenditures.Prepare journal entries for the following transactions (omit explanations).

Accepted Answer

The answer of Jasmine Company has established a petty cash...

Question 19

In a small business,because it is often cost-prohibitive to hire extra employees,the lack of certain separations of duties can best be overcome by

Accepted Answer

A) bonding the employees. 
B) getting the owner actively involved. 
C) hiring only honest employees. 
D) holding one person responsible for a given set of transactions. 
A) bonding the employees. 
B) getting the owner actively involved. 
C) hiring only honest employees. 
D) holding one person responsible for a given set of transactions.

Question 20

Good internal control dictates that one employee should oversee all related parts of a transaction.

Accepted Answer

A) True 
 B)False

Which of the following attributes of internal control would be violated if the purchasing department wrote checks to pay accounts payable?

Cash Short or Over would be debited for a shortage.

A formal request for a purchase from a requesting department of a business is known as a purchase order.

Using bar codes to take a physical inventory is considered poor accounting practice.

Compute the correct amount for each letter in the following table:

The financial statements of nonpublic companies are not required to be audited by an independent CPA.

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

Which of the following documents would not originate with the purchasing company?

A remittance advice accompanies a check sent to a vendor or the vendor's bank.

Under the perpetual inventory system,inventory losses can be identified more easily than under the periodic inventory system.

Under the perpetual inventory system,the entry to recognize inventory losses usually contains a

Public companies must have their financial statements audited,but are not required to have their internal control systems audited.

The document prepared by a department requesting the company to buy something is called a(n)

The bonding of employees is an example of which feature of a good system of internal control?

In addition to keeping the records of a purchase transaction,the accounting department should prepare and mail checks in payment of invoices.

An NSF check should appear in which section of the bank reconciliation?

The petty cash fund of Writer Company was established on May 1 and appeared as follows on May 31: (a)Prepare the journal entry on May 1 to establish the fund (omit explanation). (b)Prepare the journal entry on May 31 to replenish the fund (omit explanation).

Jasmine Company has established a petty cash fund for small expenditures.Prepare journal entries for the following transactions (omit explanations).

In a small business,because it is often cost-prohibitive to hire extra employees,the lack of certain separations of duties can best be overcome by

Good internal control dictates that one employee should oversee all related parts of a transaction.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 8: Cash and Internal Control

Which of the following attributes of internal control would be violated if the purchasing department wrote checks to pay accounts payable?

Cash Short or Over would be debited for a shortage.

A formal request for a purchase from a requesting department of a business is known as a purchase order.

Using bar codes to take a physical inventory is considered poor accounting practice.

Compute the correct amount for each letter in the following table:

The financial statements of nonpublic companies are not required to be audited by an independent CPA.

The treasurer should prepare and sign a check only after a proper check authorization has been provided.

Which of the following documents would not originate with the purchasing company?

A remittance advice accompanies a check sent to a vendor or the vendor's bank.

Under the perpetual inventory system,inventory losses can be identified more easily than under the periodic inventory system.

Under the perpetual inventory system,the entry to recognize inventory losses usually contains a

Public companies must have their financial statements audited,but are not required to have their internal control systems audited.

The document prepared by a department requesting the company to buy something is called a(n)

The bonding of employees is an example of which feature of a good system of internal control?

In addition to keeping the records of a purchase transaction,the accounting department should prepare and mail checks in payment of invoices.

An NSF check should appear in which section of the bank reconciliation?

The petty cash fund of Writer Company was established on May 1 and appeared as follows on May 31: (a)Prepare the journal entry on May 1 to establish the fund (omit explanation). (b)Prepare the journal entry on May 31 to replenish the fund (omit explanation).

Jasmine Company has established a petty cash fund for small expenditures.Prepare journal entries for the following transactions (omit explanations).

In a small business,because it is often cost-prohibitive to hire extra employees,the lack of certain separations of duties can best be overcome by

Good internal control dictates that one employee should oversee all related parts of a transaction.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters