Question 1

A credit memorandum from the bank may be used as

Accepted Answer

A)  An explanation for a payment by cheque 
B)  A bank statement 
C)  A voucher. 
D)  An EFT 
E)  A cancelled cheque 
A)  An explanation for a payment by cheque 
B)  A bank statement 
C)  A voucher. 
D)  An EFT 
E)  A cancelled cheque D

Question 2

Preventing unauthorized access to company resources is one of the most difficult and time-consuming tasks for internal control experts.

Accepted Answer

A) True 
 B)False  True

Question 3

Z-Mart established a petty cash fund recently and the following transactions affecting the fund occurred during February:
   Prepare the journal entry to reimburse the fund and to reduce its size.

Accepted Answer

$\begin{array}{|l|l|r|r|}
\hline \text { Feb 28 } & \text { Office Supplies } & 55.00 & \
\hline & \text { Entertainment Expenses } & 30.00 & \
\hline & \text { Postage Expense } & 45.00 & \
\hline & \text { Transportation-in } & 65.00 & \
\hline & \text { Janitorial Expense } & 50.00 & \
\hline & \text { Cash Over and Short } & & 5.00 \
\hline & \text { Petty Cash } & & 50.00 \
\hline & \text { Cash } & & 190.00 \
\hline
\end{array}$

Question 4

The Cash Over and Short account

Accepted Answer

A)  Is used to record a credit balance in the cash account 
B)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts 
C)  Is not necessary in a computerized accounting system 
D)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system 
E)  None of these 
A)  Is used to record a credit balance in the cash account 
B)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts 
C)  Is not necessary in a computerized accounting system 
D)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system 
E)  None of these

Question 5

The quick ratio differs from the current ratio

Accepted Answer

A)  Because liabilities are divided by current assets 
B)  Because prepaid expenses and inventory are excluded 
C)  Because it measures profitability 
D)  Because it excludes short-term investments 
E)  Because prepaid expenses and inventory are excluded and because it measures profitability 
A)  Because liabilities are divided by current assets 
B)  Because prepaid expenses and inventory are excluded 
C)  Because it measures profitability 
D)  Because it excludes short-term investments 
E)  Because prepaid expenses and inventory are excluded and because it measures profitability

Question 6

In reimbursing the petty cash fund,

Accepted Answer

A)  Cash is debited. 
B)  Petty Cash is credited. 
C)  Petty Cash is debited. 
D)  Expense accounts are debited. 
E)  Petty Cash is credited and expense accounts are debited. 
A)  Cash is debited. 
B)  Petty Cash is credited. 
C)  Petty Cash is debited. 
D)  Expense accounts are debited. 
E)  Petty Cash is credited and expense accounts are debited.

Question 7

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Match between columns
                        Premises: Z-Mart buys an insurance policy to protect against employee theft.
Z-Mart has an internal auditor on staff.
Z-Mart uses a voucher system.
The cashier does not have access to the cash register record tape and file.:
Z-Mart uses a computerized point of sale system.
Two clerks share the same cash drawer.
Z-Mart hires Nelson and McGuire, CAs, to perform an audit.
Z-Mart has separate departments for purchasing, receiving, and accounts payable.
The bookkeeper prepares and signs cheques.
Z-Mart uses a cheque protector.

Accepted Answer

The Answer of Establish responsibility. and Divide responsibility for related is...

Question 10

The acid-test ratio

Accepted Answer

A)  Is also called the quick ratio 
B)  Measures profitability 
C)  Measures liquidity 
D)  Is also called the quick ratio and measures liquidity 
E)  All of the above 
A)  Is also called the quick ratio 
B)  Measures profitability 
C)  Measures liquidity 
D)  Is also called the quick ratio and measures liquidity 
E)  All of the above

Question 11

Prepare the bank reconciliation for Swingset Company at March 31, 2022.

Accepted Answer

The answer of Prepare the bank reconciliation for Swingset Company...

Question 12

All monies disbursed from petty cash should be documented by a petty cash receipt.

Accepted Answer

A) True 
 B)False

Question 13

The bank statement and relevant portions of Lauren Lunch Service cash records for the month ended July 31, 2020 are given below.
   Bank Statement 
Cheques/Charges Deposits/Credit Balance
$\begin{array}{|r|r|r|r|}
\hline &&&10,000.00\
\hline \# 1615 & 658.00 & 2,050.00 & 11,392.00 \
\hline \# 1614 & 2,500.00 & & 8,892.00 \
\hline \# 1613 & 4,650.00 & 13,240.00 & 17,482.00 \
\hline \# 1616 & 450.00 & & 17,032.00 \
\hline \# 1612 & 1,250.00 & & 15,782.00 \
\hline \# 1618 & 3,003.00 & 12,000.00 & 24,779.00 \
\hline \# 1620 & 1,245.00 & & 23,534.00 \
\hline \# 1622 & 6,069.00 & &17,465.00 \
\hline \# 1617 & 1,245.00 & &16,220.00 \
\hline S C & 200.00 & &16,020.00 \
\hline
\end{array}$
Notes: Cheque #1618 was recorded incorrectly by the bookeeper for supplies purchase. 
Cheque #1622 was recorded incorrectly by the bank. Prepare the bank reconciliation at July 31, 2020.

Accepted Answer

The answer of The bank statement and relevant portions of...

Question 14

Cash sales total $705 and the amount of cash in the register is $685. The shortage of $20 represents an expense.

Accepted Answer

A) True 
 B)False

Question 15

What is the main motivation for retailers to accept credit cards or debit cards?

Accepted Answer

The retailer hopes to increase

Question 16

The common rule of thumb is that a company's quick ratio should be at least 1.5 to 1.

Accepted Answer

A) True 
 B)False

Question 17

The following information pertains to Z-Mart, its competitors, and the industry standards.
 $$\begin{array} { | l | r | r | r | } 
\hline & \text { Z-Mart } & \text { Diablo } & \text { Luisi } \
\hline \text { Cash } & \$ 10,350 & \$ 28,000 & \$ 29,000 \
\hline \text { Accounts receivable } & 13,140 & 4,600 & 15,640 \
\hline \text { Merchardise inventory } & 30,480 & 66,000 & 40,250 \
\hline \text { Prepaid experse } & 1,600 & { 8 } , 000 & 4,900 \
\hline \text { Accounts payable } & 18,800 & 15,720 & 28,490 \
\hline \text { Salaries payable } & 20,090 & 30,000 & 9,750 \
\hline \text { Other current payables } & 550 & 1,200 & 4,240 \
\hline
\end{array}$$ The industry standard for the current ratio is 1.8 to 1. The industry standard for the quick ratio is 1 to 1. Instructions: (1) Calculate the current ratio and quick ratio for each firm. (2) Rank the firms in decreasing order of liquidity. (3) Comment on Z-Mart's relative position.

Accepted Answer

(1)
 @#IMG-DLM& (2) Rank Order
 @#IMG-DLM& (3) Z-Mart exceed

Question 18

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Accepted Answer

A) True 
 B)False

Question 19

Omega Supply's current ratio is 2 to 1. Its quick ratio is.75 to 1. Omega Supply has a good credit risk because the ratios reveal no liquidity problem.

Accepted Answer

A) True 
 B)False

Question 20

Bank service charges are treated as a reconciling item on the book side of a bank reconciliation.

Accepted Answer

A) True 
 B)False

A credit memorandum from the bank may be used as

Preventing unauthorized access to company resources is one of the most difficult and time-consuming tasks for internal control experts.

Z-Mart established a petty cash fund recently and the following transactions affecting the fund occurred during February: Prepare the journal entry to reimburse the fund and to reduce its size.

The Cash Over and Short account

The quick ratio differs from the current ratio

In reimbursing the petty cash fund,

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

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

The acid-test ratio

Prepare the bank reconciliation for Swingset Company at March 31, 2022.

All monies disbursed from petty cash should be documented by a petty cash receipt.

Cash sales total $705 and the amount of cash in the register is $685. The shortage of $20 represents an expense.

What is the main motivation for retailers to accept credit cards or debit cards?

The common rule of thumb is that a company's quick ratio should be at least 1.5 to 1.

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Omega Supply's current ratio is 2 to 1. Its quick ratio is.75 to 1. Omega Supply has a good credit risk because the ratios reveal no liquidity problem.

Bank service charges are treated as a reconciling item on the book side of a bank reconciliation.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters

Exam 7: Internal Control and Cash

A credit memorandum from the bank may be used as

Preventing unauthorized access to company resources is one of the most difficult and time-consuming tasks for internal control experts.

Z-Mart established a petty cash fund recently and the following transactions affecting the fund occurred during February: Prepare the journal entry to reimburse the fund and to reduce its size.

The Cash Over and Short account

The quick ratio differs from the current ratio

In reimbursing the petty cash fund,

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

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

The acid-test ratio

Prepare the bank reconciliation for Swingset Company at March 31, 2022.

All monies disbursed from petty cash should be documented by a petty cash receipt.

Cash sales total $705 and the amount of cash in the register is $685. The shortage of $20 represents an expense.

What is the main motivation for retailers to accept credit cards or debit cards?

The common rule of thumb is that a company's quick ratio should be at least 1.5 to 1.

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Omega Supply's current ratio is 2 to 1. Its quick ratio is.75 to 1. Omega Supply has a good credit risk because the ratios reveal no liquidity problem.

Bank service charges are treated as a reconciling item on the book side of a bank reconciliation.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Receivables

Property, Plant and Equipment Intangibles

Payroll Liabilities

Accounting Information Systems

Filters