Question 1

External control includes control over the assets as well as ways of monitoring the company's operations.

Accepted Answer

A) True 
 B)False

Question 2

The change fund is what type of account?

Accepted Answer

A)  Expense 
B)  Revenue 
C)  Asset 
D)  Liability 
A)  Expense 
B)  Revenue 
C)  Asset 
D)  Liability

Question 3

The drawee of the cheque is the person receiving the money.

Accepted Answer

A) True 
 B)False

Question 4

Internal control over a company's assets should include the following policy:

Accepted Answer

A)  Responsibilities and duties of employees will be divided. 
B)  All cash receipts will be deposited into the bank the same day they arrive. 
C)  All cash payments will be made by cheque (except petty cash). 
D)  All of these answers are correct. 
A)  Responsibilities and duties of employees will be divided. 
B)  All cash receipts will be deposited into the bank the same day they arrive. 
C)  All cash payments will be made by cheque (except petty cash). 
D)  All of these answers are correct.

Question 5

The cheque is written and signed by the

Accepted Answer

A)  drawer. 
B)  drawee. 
C)  payee. 
D)  payer. 
A)  drawer. 
B)  drawee. 
C)  payee. 
D)  payer.

Question 6

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

Accepted Answer

A) True 
 B)False

Question 7

The bank statement included bank charges. On the bank reconciliation, the item is

Accepted Answer

A)  an addition to the balance per company books. 
B)  an addition to the balance per bank statement. 
C)  a deduction from the balance per bank statement. 
D)  a deduction from the balance per company books. 
A)  an addition to the balance per company books. 
B)  an addition to the balance per bank statement. 
C)  a deduction from the balance per bank statement. 
D)  a deduction from the balance per company books.

Question 8

The May bank statement for Lawn Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes 1. A cheque for $200 to pay the electric bill was recorded incorrectly on the books as $20.
2) Included on the bank statement was a note collected by the bank for $300 plus interest of $30.
3) Cheques outstanding totaled $360.
4) Bank service charges were $50.
5) Deposits in transit were $2,140.
The adjusted cash balance at the end of May should be

Accepted Answer

A)  $9,810. 
B)  $7,620. 
C)  $7,980. 
D)  $8,080. 
A)  $9,810. 
B)  $7,620. 
C)  $7,980. 
D)  $8,080.

Question 9

List at least five company policies that would be included in an internal control system.

Accepted Answer

1. Responsibilities and duties of employ

Question 10

If the ending balance in the Cash Short/Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

Accepted Answer

A) True 
 B)False

Question 11

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies. This would cause

Accepted Answer

A)  petty cash to be overstated. 
B)  petty cash to be understated. 
C)  assets to be overstated. 
D)  supplies to be understated. 
A)  petty cash to be overstated. 
B)  petty cash to be understated. 
C)  assets to be overstated. 
D)  supplies to be understated.

Question 12

Calculate from the following information accumulated by Linda Lee the adjusted bank balance at the end of August 2020. Bank statement ending cash balance $2,500
General ledger cash balance ending 2,750
Bank monthly service charge 20
Deposits in transit 1,400
Outstanding cheques 1,235
NSF cheque returned with bank statement 65

Accepted Answer

A)  $2,750 
B)  $2,500 
C)  $2,665 
D)  $2,435 
A)  $2,750 
B)  $2,500 
C)  $2,665 
D)  $2,435

Question 13

If a business deposits a customer's cheque and later learns that it is an insufficient funds cheque, the

Accepted Answer

A)  bank will try to collect the amount. 
B)  general ledger balance will be less than the bank balance. 
C)  business will receive a credit memorandum from the bank. 
D)  business will receive a debit memorandum from the bank. 
A)  bank will try to collect the amount. 
B)  general ledger balance will be less than the bank balance. 
C)  business will receive a credit memorandum from the bank. 
D)  business will receive a debit memorandum from the bank.

Question 14

Discuss reasons why a manager would be concerned about developing a system of internal control over the cash receipts and cash payments of the business. Describe at least five company policies that would be included in an internal control system.

Accepted Answer

a) To safeguard the company's incoming c

Question 15

Which of the following would NOT be shown on the bank statement?

Accepted Answer

A)  Bank service charge 
B)  Deposit in transit 
C)  Cancelled cheques 
D)  NSF cheque 
A)  Bank service charge 
B)  Deposit in transit 
C)  Cancelled cheques 
D)  NSF cheque

Question 16

If there is an overage in the petty cash fund it would be considered other income.

Accepted Answer

A) True 
 B)False

Question 17

An example of an internal control is

Accepted Answer

A)  the use of bank account. 
B)  all cheques are prenumbered. 
C)  all cheques written must have reference source documents. 
D)  All of these answers are correct. 
A)  the use of bank account. 
B)  all cheques are prenumbered. 
C)  all cheques written must have reference source documents. 
D)  All of these answers are correct.

Question 18

A payment for $49 is incorrectly recorded in the accounting records as $94. The $45 error should be shown on the bank reconciliation as

Accepted Answer

A)  added to the balance per bank statement. 
B)  deducted from the balance per bank statement. 
C)  added to the balance per books. 
D)  deducted from the balance per books. 
A)  added to the balance per bank statement. 
B)  deducted from the balance per bank statement. 
C)  added to the balance per books. 
D)  deducted from the balance per books.

Question 19

When a cheque is presented for payment, the bank will

Accepted Answer

A)  credit the depositor's account. 
B)  hold the cheque until deposits are cleared. 
C)  debit the depositor's account. 
D)  print more cheques for the depositor's use. 
A)  credit the depositor's account. 
B)  hold the cheque until deposits are cleared. 
C)  debit the depositor's account. 
D)  print more cheques for the depositor's use.

External control includes control over the assets as well as ways of monitoring the company's operations.

The change fund is what type of account?

The drawee of the cheque is the person receiving the money.

Internal control over a company's assets should include the following policy:

The cheque is written and signed by the

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

The bank statement included bank charges. On the bank reconciliation, the item is

List at least five company policies that would be included in an internal control system.

If the ending balance in the Cash Short/Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies. This would cause

If a business deposits a customer's cheque and later learns that it is an insufficient funds cheque, the

Discuss reasons why a manager would be concerned about developing a system of internal control over the cash receipts and cash payments of the business. Describe at least five company policies that would be included in an internal control system.

Which of the following would NOT be shown on the bank statement?

If there is an overage in the petty cash fund it would be considered other income.

An example of an internal control is

A payment for $49 is incorrectly recorded in the accounting records as $94. The $45 error should be shown on the bank reconciliation as

When a cheque is presented for payment, the bank will

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters

Exam 8: Banking Procedures and Control of Cash

External control includes control over the assets as well as ways of monitoring the company's operations.

The change fund is what type of account?

The drawee of the cheque is the person receiving the money.

Internal control over a company's assets should include the following policy:

The cheque is written and signed by the

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

The bank statement included bank charges. On the bank reconciliation, the item is

List at least five company policies that would be included in an internal control system.

If the ending balance in the Cash Short/Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies. This would cause

If a business deposits a customer's cheque and later learns that it is an insufficient funds cheque, the

Discuss reasons why a manager would be concerned about developing a system of internal control over the cash receipts and cash payments of the business. Describe at least five company policies that would be included in an internal control system.

Which of the following would NOT be shown on the bank statement?

If there is an overage in the petty cash fund it would be considered other income.

An example of an internal control is

A payment for $49 is incorrectly recorded in the accounting records as $94. The $45 error should be shown on the bank reconciliation as

When a cheque is presented for payment, the bank will

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

Filters