Question 1

Discuss the purpose of a bank reconciliation.

Accepted Answer

A bank reconciliation is a procedure des

Question 2

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Accepted Answer

The retailer normally receives payment f

Question 3

Chequing accounts are sometimes called savings accounts.

Accepted Answer

A) True 
 B)False

Question 4

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 5

Cash equivalents are short-term investments that a company invests in to increase earnings.

Accepted Answer

A) True 
 B)False

Question 6

Cash equivalents

Accepted Answer

A)  Are readily convertible to a known cash amount 
B)  Include short-term investments purchased to increase earnings 
C)  Are often combined with cash as a single balance sheet item 
D)  Are readily convertible to a known cash amount and include short-term investments purchased to increase earnings 
E)  All of the above 
A)  Are readily convertible to a known cash amount 
B)  Include short-term investments purchased to increase earnings 
C)  Are often combined with cash as a single balance sheet item 
D)  Are readily convertible to a known cash amount and include short-term investments purchased to increase earnings 
E)  All of the above

Question 7

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

Accepted Answer

A) True 
 B)False

Question 8

EFT is the use of electronic communication to transfer cash from one party to another.

Accepted Answer

A) True 
 B)False

Question 9

The following information was available for Wild Oat Company for the month ended May 31, 2020.
 (a) The book balance at May 31,2020 was $\$ 6,890.22$.
(b) The bank balance at May 31,2020 was $\$ 8,660.22$
(c) Outstariding cheques armounted to $\$ 6,310$.
(d) The may 31 st cash receipts of $\$ 5,600$ were deposited but have not yet appeared on the bank statement.
(e) A $\$ 50$ debit memorardum for cheques prirted by the bank was included with the caricelled cheques.
(f) A customer' 5 note for $\$ 1,000$ was collected by the bank. In addition interest on the Dote was $\$ 110$ Prepare a bank reconciliation for Wild Oat Company at May 31, 2020.

Accepted Answer

The answer of The following information was available for Wild...

Question 10

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund will include a

Accepted Answer

A)  Debit to Cash Short and Over for $10 
B)  Debit to Cash for $165 
C)  Debit to Miscellaneous Expenses for $35 
D)  Credit to Petty Cash for $165 
E)  Credit to Cash for $165 
A)  Debit to Cash Short and Over for $10 
B)  Debit to Cash for $165 
C)  Debit to Miscellaneous Expenses for $35 
D)  Credit to Petty Cash for $165 
E)  Credit to Cash for $165

Question 11

The quick assets are

Accepted Answer

A)  Cash, short-term investments, prepaid expenses 
B)  Cash, short-term investments, accounts receivable 
C)  Cash, inventory, accounts receivable 
D)  Cash, accounts receivable, prepaid expenses 
E)  Accounts receivable, inventory, prepaid expenses 
A)  Cash, short-term investments, prepaid expenses 
B)  Cash, short-term investments, accounts receivable 
C)  Cash, inventory, accounts receivable 
D)  Cash, accounts receivable, prepaid expenses 
E)  Accounts receivable, inventory, prepaid expenses

Question 12

Limitations of internal control include

Accepted Answer

A)  Human error 
B)  Human fraud 
C)  Cost-benefit standard 
D)  Human error and fraud 
E)  All of the above 
A)  Human error 
B)  Human fraud 
C)  Cost-benefit standard 
D)  Human error and fraud 
E)  All of the above

Question 13

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

Accepted Answer

A) True 
 B)False

Question 14

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Accepted Answer

A) True 
 B)False

Question 15

Principles of internal control include:

Accepted Answer

A)  Record purchases using the gross method. 
B)  Divide responsibilities for related transactions. 
C)  Perform regular and independent reviews. 
D)  Divide responsibilities for related transactions and perform regular and independent reviews. 
E)  All of the above 
A)  Record purchases using the gross method. 
B)  Divide responsibilities for related transactions. 
C)  Perform regular and independent reviews. 
D)  Divide responsibilities for related transactions and perform regular and independent reviews. 
E)  All of the above

Question 16

The fees charged businesses by banks on credit card transactions can be shown on the income statement as

Accepted Answer

A)  A discount from revenue used in determining net sales 
B)  A selling expense 
C)  An administrative expense 
D)  All of the above 
E)  None of these 
A)  A discount from revenue used in determining net sales 
B)  A selling expense 
C)  An administrative expense 
D)  All of the above 
E)  None of these

Question 17

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Accepted Answer

A) True 
 B)False

Question 18

Prepare the journal entries resulting from the bank reconciliation.
 $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 4,375 \
\hline \text { Note receivable } & &3,458 \
\hline \text { Interest reverue } & & 1255 \
\hline
\end{array}$$

Accepted Answer

The answer of Prepare the journal entries resulting from the...

Question 19

Credit card expense may be classified as

Accepted Answer

A)  A discount deducted from sales to get net sales 
B)  A selling expense 
C)  An administrative expense 
D)  A selling expense and an administrative expense 
E)  All of the above 
A)  A discount deducted from sales to get net sales 
B)  A selling expense 
C)  An administrative expense 
D)  A selling expense and an administrative expense 
E)  All of the above

Question 20

The owner of Zeke's Landscaping Designs just hired an office manager to handle all the office functions for him. Among other responsibilities, the office manager will handle key accounting functions such as processing customer payments, writing cheques to employees to pay the payroll, handle daily bank deposits at the bank, pay suppliers, and reconcile the company bank account bank reconciliations. What internal cash control practice is being overlooked by the owner?

Accepted Answer

A)  Making daily cash deposits 
B)  Frequent preparation of bank reconciliations 
C)  Separation of cash payment from cash disbursement function 
D)  Ensuring all cash disbursements are tracked by making payments by cheque 
E)  Performing external audit 
A)  Making daily cash deposits 
B)  Frequent preparation of bank reconciliations 
C)  Separation of cash payment from cash disbursement function 
D)  Ensuring all cash disbursements are tracked by making payments by cheque 
E)  Performing external audit

Discuss the purpose of a bank reconciliation.

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Chequing accounts are sometimes called savings accounts.

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Cash equivalents are short-term investments that a company invests in to increase earnings.

Cash equivalents

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

EFT is the use of electronic communication to transfer cash from one party to another.

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund will include a

The quick assets are

Limitations of internal control include

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Principles of internal control include:

The fees charged businesses by banks on credit card transactions can be shown on the income statement as

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Prepare the journal entries resulting from the bank reconciliation. Cash 4,375 Note receivable 3,458 Interest reverue 1255

Credit card expense may be classified as

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

Discuss the purpose of a bank reconciliation.

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Chequing accounts are sometimes called savings accounts.

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Cash equivalents are short-term investments that a company invests in to increase earnings.

Cash equivalents

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

EFT is the use of electronic communication to transfer cash from one party to another.

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund will include a

The quick assets are

Limitations of internal control include

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Principles of internal control include:

The fees charged businesses by banks on credit card transactions can be shown on the income statement as

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Prepare the journal entries resulting from the bank reconciliation. Cash 4,375 Note receivable 3,458 Interest reverue 1255

Credit card expense may be classified as

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