Question 1

A very small company would have the most difficulty in implementing which of the following internal control activities?

Accepted Answer

A) Sound personnel procedures 
B) Periodic independent verification 
C) Limited access to assets 
D) Separation of duties 
A) Sound personnel procedures 
B) Periodic independent verification 
C) Limited access to assets 
D) Separation of duties

Question 2

A company establishes a $150 petty cash fund.The fund is replenished in the amount of $136,after petty cash vouchers of $66 for transportation,$44 for supplies,and $22 for postage had accumulated.Was there a cash shortage,overage,or neither? (State amount if overage or shortage.)

Accepted Answer

$4 shortag

Question 3

It is best that the receiving department not be given a copy of the purchase order or the invoice.

Accepted Answer

A) True 
 B)False

Question 4

A petty cash fund is established for small payments for which writing a check would be impractical.

Accepted Answer

A) True 
 B)False

Question 5

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Accepted Answer

A physical inventory must be taken to de

Question 6

Which of the following is an appropriate internal control activity for cash?

Accepted Answer

A) Recordkeeping and custodianship over cash should be performed by the same person. 
B) The amount of cash on hand should be kept to a minimum. 
C) Banking facilities should be used as little as possible. 
D) All payments should be made with currency,not checks. 
A) Recordkeeping and custodianship over cash should be performed by the same person. 
B) The amount of cash on hand should be kept to a minimum. 
C) Banking facilities should be used as little as possible. 
D) All payments should be made with currency,not checks.

Question 7

The Sarbanes-Oxley Act of 2002 does not require any certification from a public company's chief executive officer about the company's system of internal control.

Accepted Answer

A) True 
 B)False

Question 8

The petty cash fund should be replenished

Accepted Answer

A) only for the total amount of expense receipts on hand. 
B) for the total amount that was originally set up in the imprest fund. 
C) for the total amount of expense receipts on hand plus cash remaining before replenishment. 
D) for the amount needed to bring the petty cash fund back to its imprest amount. 
A) only for the total amount of expense receipts on hand. 
B) for the total amount that was originally set up in the imprest fund. 
C) for the total amount of expense receipts on hand plus cash remaining before replenishment. 
D) for the amount needed to bring the petty cash fund back to its imprest amount.

Question 9

The following information pertains to the bank transactions of Rawlins Company:
a. Cash on the books as of April 30 was $499.Cash as shown on the bank statement for the same date was $1,330.
b. A deposit of $160,representing cash receipts as of April 30,did not apppear on the bank statement.
c. Outstanding checks totaled $240.
d. Bank service charges for April amounted to $9
e. The bank collected for Rawlins Company $840 (which includes $40 interest)on a note left for collection.
f. An NSF check for $80 from a customer,Joe Beck,was returned with the statement.
Required:
1. Prepare a bank reconciliation for Rawlins Company as of April 30.
2. State the amount of cash that would appear on the balance sheet as of April 30.

Accepted Answer

The answer of The following information pertains to the bank...

Question 10

An understated ending inventory will produce an overstated cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 11

When the balance of a petty cash fund is increased,the entry would contain a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 12

The Sarbanes-Oxley Act has not stopped the occurrence of fraud,and additional guidance with regard to internal controls is expected to be issued.

Accepted Answer

A) True 
 B)False

Question 13

Cash and equivalents can consist of all of the following except

Accepted Answer

A) deposits in checking accounts 
B) IOUs from customers 
C) certificates of deposit (CDs) 
D) U.S.Treasury notes 
A) deposits in checking accounts 
B) IOUs from customers 
C) certificates of deposit (CDs) 
D) U.S.Treasury notes

Question 14

The Sarbanes-Oxley Act of 2002 requires all of the following to certify a public company's system of internal control,except for the

Accepted Answer

A) chief financial officer. 
B) the independent auditors. 
C) the board of directors. 
D) chief executive officer. 
A) chief financial officer. 
B) the independent auditors. 
C) the board of directors. 
D) chief executive officer.

Question 15

Bonding provides a guarantee against theft.

Accepted Answer

A) True 
 B)False

Question 16

Why is the separation of duties an important control activity in a good system of internal control?

Accepted Answer

When only one employee is responsible fo

Question 17

A good system of internal control is designed to achieve all of the following except

Accepted Answer

A) efficiency of operations. 
B) reliability of financial reporting. 
C) compliance with relevant laws and regulations. 
D) attainment of target sales. 
A) efficiency of operations. 
B) reliability of financial reporting. 
C) compliance with relevant laws and regulations. 
D) attainment of target sales.

Question 18

Cash equivalents are usually listed as short-term investments on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

The materiality concept dictates that no internal controls be established over petty cash.

Accepted Answer

A) True 
 B)False

Question 20

On a bank reconciliation,interest income would be added to the balance per bank.

Accepted Answer

A) True 
 B)False

A very small company would have the most difficulty in implementing which of the following internal control activities?

A company establishes a $150 petty cash fund.The fund is replenished in the amount of $136,after petty cash vouchers of $66 for transportation,$44 for supplies,and $22 for postage had accumulated.Was there a cash shortage,overage,or neither? (State amount if overage or shortage.)

It is best that the receiving department not be given a copy of the purchase order or the invoice.

A petty cash fund is established for small payments for which writing a check would be impractical.

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Which of the following is an appropriate internal control activity for cash?

The Sarbanes-Oxley Act of 2002 does not require any certification from a public company's chief executive officer about the company's system of internal control.

The petty cash fund should be replenished

An understated ending inventory will produce an overstated cost of goods sold.

When the balance of a petty cash fund is increased,the entry would contain a credit to Petty Cash.

The Sarbanes-Oxley Act has not stopped the occurrence of fraud,and additional guidance with regard to internal controls is expected to be issued.

Cash and equivalents can consist of all of the following except

The Sarbanes-Oxley Act of 2002 requires all of the following to certify a public company's system of internal control,except for the

Bonding provides a guarantee against theft.

Why is the separation of duties an important control activity in a good system of internal control?

A good system of internal control is designed to achieve all of the following except

Cash equivalents are usually listed as short-term investments on the balance sheet.

The materiality concept dictates that no internal controls be established over petty cash.

On a bank reconciliation,interest income would be added to the balance per bank.

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

A very small company would have the most difficulty in implementing which of the following internal control activities?

A company establishes a $150 petty cash fund.The fund is replenished in the amount of $136,after petty cash vouchers of $66 for transportation,$44 for supplies,and $22 for postage had accumulated.Was there a cash shortage,overage,or neither? (State amount if overage or shortage.)

It is best that the receiving department not be given a copy of the purchase order or the invoice.

A petty cash fund is established for small payments for which writing a check would be impractical.

Under a perpetual inventory system,is it necessary to take a physical inventory at the end of the period? Why or why not?

Which of the following is an appropriate internal control activity for cash?

The Sarbanes-Oxley Act of 2002 does not require any certification from a public company's chief executive officer about the company's system of internal control.

The petty cash fund should be replenished

An understated ending inventory will produce an overstated cost of goods sold.

When the balance of a petty cash fund is increased,the entry would contain a credit to Petty Cash.

The Sarbanes-Oxley Act has not stopped the occurrence of fraud,and additional guidance with regard to internal controls is expected to be issued.

Cash and equivalents can consist of all of the following except

The Sarbanes-Oxley Act of 2002 requires all of the following to certify a public company's system of internal control,except for the

Bonding provides a guarantee against theft.

Why is the separation of duties an important control activity in a good system of internal control?

A good system of internal control is designed to achieve all of the following except

Cash equivalents are usually listed as short-term investments on the balance sheet.

The materiality concept dictates that no internal controls be established over petty cash.

On a bank reconciliation,interest income would be added to the balance per bank.

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