Question 1

GAAP's, accounting and internal control procedures related to cash and the definition of cash equivalents, as compared to IFRS are:

Accepted Answer

The answer of GAAP's, accounting and internal control procedures related...

Question 2

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

Accepted Answer

A) Everyone in the organization. 
B) An individual and his/her supervisor. 
C) Only one individual. 
D) The CEO. 
A) Everyone in the organization. 
B) An individual and his/her supervisor. 
C) Only one individual. 
D) The CEO.

Question 3

The reconciliation of the cash register tape with the cash in the register is an example of

Accepted Answer

A) other controls. 
B) independent internal verification. 
C) establishment of responsibility. 
D) segregation of duties. 
A) other controls. 
B) independent internal verification. 
C) establishment of responsibility. 
D) segregation of duties.

Question 4

Entries are made to the Petty Cash account when

Accepted Answer

A) establishing the fund. 
B) making payments out of the fund. 
C) recording shortages in the fund. 
D) replenishing the fund. 
A) establishing the fund. 
B) making payments out of the fund. 
C) recording shortages in the fund. 
D) replenishing the fund.

Question 5

The following credit sales are budgeted by Milford Company: $$\begin{array} { l r } 
\text { May } & \$ 476,000 \
\text { June } & 700,000 \
\text { July } & 980,000 \
\text { August } & 840,000
\end{array}$$ The company's past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of August is

Accepted Answer

A) $864,080. 
B) $784,000. 
C) $840,000. 
D) $823,200. 
A) $864,080. 
B) $784,000. 
C) $840,000. 
D) $823,200.

Question 6

Which of the following bank reconciliation items would not result in an adjusting entry?

Accepted Answer

A) Service charge. 
B) Deposits in transit. 
C) NSF check of customer. 
D) Collection of a note by the bank. 
A) Service charge. 
B) Deposits in transit. 
C) NSF check of customer. 
D) Collection of a note by the bank.

Question 7

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

Accepted Answer

A) Time lags. 
B) Errors by the bank. 
C) Errors by the company. 
D) All of these answer choices are correct. 
A) Time lags. 
B) Errors by the bank. 
C) Errors by the company. 
D) All of these answer choices are correct.

Question 8

For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?

Accepted Answer

A) Check written for $63, but recorded by the company as $36. 
B) Deposit of $600 recorded by the bank as $60. 
C) A returned $300 check recorded by the bank as $30. 
D) Check written for $57, but recorded by the company as $75. 
A) Check written for $63, but recorded by the company as $36. 
B) Deposit of $600 recorded by the bank as $60. 
C) A returned $300 check recorded by the bank as $30. 
D) Check written for $57, but recorded by the company as $75.

Question 9

IFRS, compared to GAAP, tends to be more

Accepted Answer

A) detailed. 
B) rules-based. 
C) principles-based. 
D) full of disclosures requirements. 
A) detailed. 
B) rules-based. 
C) principles-based. 
D) full of disclosures requirements.

Question 10

A NSF check should appear in which section of the bank reconciliation?

Accepted Answer

A) Addition to the balance per books. 
B) Deduction from the balance per bank. 
C) Addition to the balance per bank. 
D) Deduction from the balance per books. 
A) Addition to the balance per books. 
B) Deduction from the balance per bank. 
C) Addition to the balance per bank. 
D) Deduction from the balance per books.

Question 11

Before a check authorization is issued, the following documents must be in agreement, except for the

Accepted Answer

A) invoice. 
B) remittance advice. 
C) receiving report. 
D) purchase order. 
A) invoice. 
B) remittance advice. 
C) receiving report. 
D) purchase order.

Question 12

A $200 petty cash fund has cash of $32 and receipts of $172. The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for $168. 
B) credit to Petty Cash for $168. 
C) credit to Cash Over and Short for $4. 
D) credit to Cash for $172. 
A) debit to Cash for $168. 
B) credit to Petty Cash for $168. 
C) credit to Cash Over and Short for $4. 
D) credit to Cash for $172.

Question 13

Internal controls are concerned with

Accepted Answer

A) only manual systems of accounting. 
B) the extent of government regulations. 
C) safeguarding assets. 
D) preparing income tax returns. 
A) only manual systems of accounting. 
B) the extent of government regulations. 
C) safeguarding assets. 
D) preparing income tax returns.

Question 14

Which of the following would not be included in the definition of cash?

Accepted Answer

A) Money on deposit in a bank. 
B) Coins. 
C) NSF checks. 
D) Petty cash. 
A) Money on deposit in a bank. 
B) Coins. 
C) NSF checks. 
D) Petty cash.

Question 15

The petty cash fund eliminates the need for a bank checking account.

Accepted Answer

A) True 
 B)False

Question 16

Bonding means insuring a company against theft by employees.

Accepted Answer

A) True 
 B)False

Question 17

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the cash account.

Accepted Answer

A) True 
 B)False

Question 18

The following information was taken from Molina Company cash budget for the month of November: $\begin{array}{lr}
\text { Beginning cash balance } & \$ 144,000 \
\text { Cash receipts } & 174,000 \
\text { Cash disbursements } & 240,000
\end{array}$ If the company has a policy of maintaining an end-of-the-month cash balance of $120,000, the amount the company would have to borrow is

Accepted Answer

A) $66,000. 
B) $0. 
C) $42,000. 
D) $120,000. 
A) $66,000. 
B) $0. 
C) $42,000. 
D) $120,000.

Question 19

Internal control is most effective when several people are responsible for a given task.

Accepted Answer

A) True 
 B)False

Question 20

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Accepted Answer

A) True 
 B)False

Exam 6: Fraud, Internal Control, and Cash

GAAP's, accounting and internal control procedures related to cash and the definition of cash equivalents, as compared to IFRS are:

Under the concept of establishment of responsibility, how many people should have the ultimate responsibility?

The reconciliation of the cash register tape with the cash in the register is an example of

Entries are made to the Petty Cash account when

Which of the following bank reconciliation items would not result in an adjusting entry?

What causes the balance on the bank statement to differ from the cash balance in the general ledger?

For which of the following errors should the appropriate amount be subtracted from the balance per books on a bank reconciliation?

IFRS, compared to GAAP, tends to be more

A NSF check should appear in which section of the bank reconciliation?

Before a check authorization is issued, the following documents must be in agreement, except for the

A $200 petty cash fund has cash of $32 and receipts of $172. The journal entry to replenish the account would include a

Internal controls are concerned with

Which of the following would not be included in the definition of cash?

The petty cash fund eliminates the need for a bank checking account.

Bonding means insuring a company against theft by employees.

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the cash account.

Internal control is most effective when several people are responsible for a given task.

The responsibility for keeping the records for an asset should be separate from the physical custody of that asset.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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