Question 1

Corbin Company was charged $25 for a check printing fee associated with its checking account. Which journal entry is required?

Accepted Answer

A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required. 
A) Debit Miscellaneous Expense for $25 and credit Accounts Payable for $25. 
B) Debit Miscellaneous Expense for $25 and credit Accounts Receivable for $25. 
C) Debit Miscellaneous Expense for $25 and credit Cash for $25. 
D) No journal entry is required.

Question 2

The person who prepares the bank reconciliation:

Accepted Answer

A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties. 
A) should also be responsible for cash receipts. 
B) should also be responsible for cash disbursements. 
C) should be responsible for both cash receipts and cash disbursements. 
D) should have no other cash duties.

Question 3

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

Accepted Answer

A) imprest system. 
B) lock-box system. 
C) phishing system. 
D) online banking system. 
A) imprest system. 
B) lock-box system. 
C) phishing system. 
D) online banking system.

Question 4

There are three parties to a check. The person who signs the check is the:

Accepted Answer

A) maker. 
B) payee. 
C) draftee. 
D) promisee. 
A) maker. 
B) payee. 
C) draftee. 
D) promisee.

Question 5

The cash budget period can span any length of time.

Accepted Answer

A) True 
 B)False

Question 6

List the five internal control procedures.

Accepted Answer

Smart hiring and separation of

Question 7

A receiving report informs a vendor of the amount of goods received by the purchaser.

Accepted Answer

A) True 
 B)False

Question 8

Hill Company established a petty cash fund of $500. The first transaction was the purchase of stamps for $46. Which of the following statements is CORRECT?

Accepted Answer

A) The petty cash custodian prepares a petty cash voucher to list the item purchased. 
B) The amount of cash on hand should equal $454. 
C) The amount of cash on hand and the cash voucher should be maintained in a cash box or other secure device. 
D) All of the statements are correct. 
A) The petty cash custodian prepares a petty cash voucher to list the item purchased. 
B) The amount of cash on hand should equal $454. 
C) The amount of cash on hand and the cash voucher should be maintained in a cash box or other secure device. 
D) All of the statements are correct.

Question 9

The duties of purchasing goods and receiving the goods should be given to the same employee.

Accepted Answer

A) True 
 B)False

Question 10

The following pertains to Carlisle Company:
1. Balance per bank statement, dated March 31, $4,450.
2. Balance of Cash account on company's books at March 31, $4,459.
3. The $1,300 deposit of March 31 was not included in the bank statement.
4. Of the checks recorded as cash disbursements in March, checks totaling $1,050 have not cleared the bank.
5. Service charges for the month, $10.
6. The bank erroneously charged the company's account for a $200 check of another company with a similar name.
7. The bank credited the company's account with the $1,000 proceeds of a noninterest-bearing note that it collected for the company.
8. NSF check of $75 was returned with the bank statement.
9. The bank paid and charged to the company's account a $507 noninterest-bearing note of the company. The payment has not been recorded by the company.
10. The bookkeeper recorded a customer's check of $148 as $135.
11. The bank credited the company's account for $20 interest earned.
Prepare the bank reconciliation as of March 31.

Accepted Answer

The answer of The following pertains to Carlisle Company:
1. Balance...

Question 11

In a bank reconciliation, a NSF check is:

Accepted Answer

A) added to the bank balance. 
B) added to the book balance. 
C) subtracted from the book balance. 
D) subtracted from the bank balance. 
A) added to the bank balance. 
B) added to the book balance. 
C) subtracted from the book balance. 
D) subtracted from the bank balance.

Question 12

Payments by check or EFT represent an important internal control.

Accepted Answer

A) True 
 B)False

Question 13

Jim's Company has the following items: cash in a checking account, $3000; cash in a savings account, $8000; high-grade government securities due in one month (purchased last month), $3596; accounts receivable, $3500; cash pledged as collateral for a loan, $11,700. How much should appear as Restricted Cash on the balance sheet?

Accepted Answer

A) $11,000 
B) $11,700 
C) $14,500 
D) $3596 
A) $11,000 
B) $11,700 
C) $14,500 
D) $3596

Question 14

The following are examples of items that appear on a bank reconciliation. Classify each item as (a)an addition to the bank balance, (b)a subtraction from the bank balance, (c)an addition to the book balance, or (d)a subtraction from the book balance.
1. NSF check
2. Deposits in transit
3. Interest revenue on checking account
4. Bank error - the bank credited the company's account for a deposit made by another customer
5. EFT rent collection
6. Service charge
7. Book error - the company credited cash for $100 when the correct amount was $1,000
8. Outstanding checks
9. Bank collection of a note receivable on behalf of the company

Accepted Answer

1. d, 2. a, 3. c, 4.

Question 15

Kulvekowski Company prepares a cash budget. The beginning cash balance is $1,000,000. The budgeted cash balance is $800,000. The company has budgeted cash payments of $500,000 and budgeted cash receipts of $1,400,000. What amount of cash is available for investing?

Accepted Answer

A) $0 
B) $1,900,000 
C) $500,000 
D) $1,100,000 
A) $0 
B) $1,900,000 
C) $500,000 
D) $1,100,000

Question 16

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Beta Company is the:

Accepted Answer

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

Question 17

The person performing the bank reconciliation should have no other cash duties.

Accepted Answer

A) True 
 B)False

Question 18

In the cash budget, the beginning balance Cash plus budgeted cash receipts minus ________, equals Cash available before new financing.

Accepted Answer

A) budgeted cash payments 
B) budgeted cash balance 
C) cash used for investing activities 
D) cash used for investing and financing activities 
A) budgeted cash payments 
B) budgeted cash balance 
C) cash used for investing activities 
D) cash used for investing and financing activities

Question 19

One of the elements of the fraud triangle is opportunity.

Accepted Answer

A) True 
 B)False

Question 20

________ is the most common fraud, but ________ is the most expensive fraud.

Accepted Answer

A) Fraudulent financial reporting; misappropriation of assets 
B) Misappropriation of assets; fraudulent financial reporting 
C) Misappropriation of assets; cooking the books 
D) Cooking the books; misappropriation of assets 
A) Fraudulent financial reporting; misappropriation of assets 
B) Misappropriation of assets; fraudulent financial reporting 
C) Misappropriation of assets; cooking the books 
D) Cooking the books; misappropriation of assets

Corbin Company was charged $25 for a check printing fee associated with its checking account. Which journal entry is required?

The person who prepares the bank reconciliation:

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

There are three parties to a check. The person who signs the check is the:

The cash budget period can span any length of time.

List the five internal control procedures.

A receiving report informs a vendor of the amount of goods received by the purchaser.

Hill Company established a petty cash fund of $500. The first transaction was the purchase of stamps for $46. Which of the following statements is CORRECT?

The duties of purchasing goods and receiving the goods should be given to the same employee.

In a bank reconciliation, a NSF check is:

Payments by check or EFT represent an important internal control.

Kulvekowski Company prepares a cash budget. The beginning cash balance is $1,000,000. The budgeted cash balance is $800,000. The company has budgeted cash payments of $500,000 and budgeted cash receipts of $1,400,000. What amount of cash is available for investing?

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Beta Company is the:

The person performing the bank reconciliation should have no other cash duties.

In the cash budget, the beginning balance Cash plus budgeted cash receipts minus ________, equals Cash available before new financing.

One of the elements of the fraud triangle is opportunity.

is the most common fraud, but is the most expensive fraud.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Internal Control Cash

Corbin Company was charged $25 for a check printing fee associated with its checking account. Which journal entry is required?

The person who prepares the bank reconciliation:

A system of handling cash receipts by mail whereby customers send checks in payment of their accounts directly to a post office box controlled by a bank is a(n):

There are three parties to a check. The person who signs the check is the:

The cash budget period can span any length of time.

List the five internal control procedures.

A receiving report informs a vendor of the amount of goods received by the purchaser.

Hill Company established a petty cash fund of $500. The first transaction was the purchase of stamps for $46. Which of the following statements is CORRECT?

The duties of purchasing goods and receiving the goods should be given to the same employee.

In a bank reconciliation, a NSF check is:

Payments by check or EFT represent an important internal control.

Kulvekowski Company prepares a cash budget. The beginning cash balance is $1,000,000. The budgeted cash balance is $800,000. The company has budgeted cash payments of $500,000 and budgeted cash receipts of $1,400,000. What amount of cash is available for investing?

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Beta Company is the:

The person performing the bank reconciliation should have no other cash duties.

In the cash budget, the beginning balance Cash plus budgeted cash receipts minus ________, equals Cash available before new financing.

One of the elements of the fraud triangle is opportunity.

________ is the most common fraud, but ________ is the most expensive fraud.

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Long-Term Investments the Time Value of Money

Liabilities

Stockholders Equity

Evaluating Performance: Earnings Quality, the Income Statement, Statement of Comprehensive Income

The Statement of Cash Flows

Financial Statement Analysis

Filters

is the most common fraud, but is the most expensive fraud.