Question 1

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Accepted Answer

A) True 
 B)False

Question 2

If a petty cash fund is established in the amount of $200, and contains $118 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?

Accepted Answer

A)  Petty Cash, $85. 
B)  Petty Cash, $82. 
C)  Cash, $82; Cash Over and Short, $3. 
D)  Cash, $82. 
A)  Petty Cash, $85. 
B)  Petty Cash, $82. 
C)  Cash, $82; Cash Over and Short, $3. 
D)  Cash, $82.

Question 3

In the month of May, Jansen Company wrote checks in the amount of $39,100. In the June, checks in the amount of $35,000 were written. In May, $37,000 of these checks were presented to the bank for payment, and $32,000 in June. What is the amount of outstanding checks at the end of May?

Accepted Answer

A)  CHF5,100. 
B)  CHF3,100. 
C)  CHF3,000. 
D)  CHF2,100. 
A)  CHF5,100. 
B)  CHF3,100. 
C)  CHF3,000. 
D)  CHF2,100.

Question 4

A bank statement

Accepted Answer

A)  lets a depositor know the financial position of the bank as of a certain date. 
B)  is a credit reference letter written by the depositor's bank. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity which increased or decreased the depositor's account balance. 
A)  lets a depositor know the financial position of the bank as of a certain date. 
B)  is a credit reference letter written by the depositor's bank. 
C)  is a bill from the bank for services rendered. 
D)  shows the activity which increased or decreased the depositor's account balance.

Question 5

All of the following would be included as a cash equivalent on the statement of financial position except

Accepted Answer

A)  money market funds. 
B)  commercial paper 
C)  U.S. Treasury bills, due in 30 days. 
D)  cash restricted for plant expansion in 2 years. 
A)  money market funds. 
B)  commercial paper 
C)  U.S. Treasury bills, due in 30 days. 
D)  cash restricted for plant expansion in 2 years.

Question 6

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

Accepted Answer

A)  establishment of responsibility is violated. 
B)  independent internal verification is violated. 
C)  documentation procedures is violated. 
D)  segregation of duties is violated. 
A)  establishment of responsibility is violated. 
B)  independent internal verification is violated. 
C)  documentation procedures is violated. 
D)  segregation of duties is violated.

Question 7

If a check correctly written and paid by the bank for $517 is incorrectly recorded on the company's books for $571, the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A)  add $54 to the bank's balance. 
B)  add $54 to the book's balance. 
C)  deduct $54 from the bank's balance. 
D)  deduct $517 from the book's balance. 
A)  add $54 to the bank's balance. 
B)  add $54 to the book's balance. 
C)  deduct $54 from the bank's balance. 
D)  deduct $517 from the book's balance.

Question 8

The control principle related to not having the same person authorize and pay for goods is known as

Accepted Answer

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

Question 9

On May 1, 2014, Vuitton Company established a petty cash fund by issuing a check for €500 to Antoinette Mercier, the custodian of the petty cash fund. On May 31, 2014, Mercier submitted the following paid petty cash vouchers for replenishment of the petty cash fund when there is €20 cash in the fund:   The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash Over and Short for €10. 
B)  credit to Petty Cash for €470. 
C)  debit to Cash for €470. 
D)  credit to Cash for €500. 
A)  debit to Cash Over and Short for €10. 
B)  credit to Petty Cash for €470. 
C)  debit to Cash for €470. 
D)  credit to Cash for €500.

Question 10

Quayle Company gathered the following reconciling information in preparing its August bank reconciliation:   The adjusted cash balance per books on August 31 is

Accepted Answer

A)  $9,820. 
B)  $9,520. 
C)  $6,120. 
D)  $6,420. 
A)  $9,820. 
B)  $9,520. 
C)  $6,120. 
D)  $6,420.

Question 11

Wynn Company developed the following reconciling information in preparing its September bank reconciliation:   Determine the cash balance per books (before adjustments) for Wynn Company.

Accepted Answer

A)  $13,700. 
B)  $24,000. 
C)  $5,700. 
D)  $20,000. 
A)  $13,700. 
B)  $24,000. 
C)  $5,700. 
D)  $20,000.

Question 12

Medaid is a medical office management franchise. There are currently twenty-five medical offices managed by a Medaid franchisee. One of the services provided to franchisees is assistance in training various staff members.
Medaid is preparing a manual for the front office staff to use as a reference guide. It will be used in training new employees as well. One of the reasons the manual is being prepared is to stress the importance of strong internal controls.
Required:
Prepare a short paragraph, to be included in the training materials, describing the benefits of sound internal control, from the viewpoint of the employee.

Accepted Answer

All the controls discussed in this manua

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The cash records of Sanders Company show the following:
1. In September, deposits per the bank statement totaled €39,600; deposits per books €37,000; and deposits in transit at September 30 were €2,500.
2. In September, cash disbursements per books were €35,500; checks clearing the bank were €37,800; and outstanding checks at September 30 were €4,500.
There were no bank debit or credit memoranda and no errors were made by either the bank or Sanders Company.
Answer the following questions:
(a) What were the deposits in transit at August 31?
(b) What were the outstanding checks at August 31?

Accepted Answer

The answer of The cash records of Sanders Company show...

Question 15

Tang Company assembled the following information in completing its June bank reconciliation: balance per bank HK$42,920; outstanding checks HK$24,650; deposits in transit HK$27,500; NSF check HK$4,480; bank service charge HK$170; cash balance per books HK$50,420. As a result of this reconciliation, Tang will

Accepted Answer

A)  reduce its cash account by HK $7,500. 
B)  increase its cash account by HK $2,850. 
C)  increase its cash account by HK $4,480. 
D)  reduce its cash account by HK $4,650. 
A)  reduce its cash account by HK $7,500. 
B)  increase its cash account by HK $2,850. 
C)  increase its cash account by HK $4,480. 
D)  reduce its cash account by HK $4,650.

Question 16

If employees are bonded

Accepted Answer

A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company. 
A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company.

Question 17

Proper control for over-the-counter cash receipts includes

Accepted Answer

A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature. 
A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature.

Question 18

Petty cash funds are not included in the cash balance reported on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 19

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of

Accepted Answer

A)  1 month or less when purchased. 
B)  3 months or less when purchased. 
C)  6 months or less when purchased. 
D)  1 year or less when purchased. 
A)  1 month or less when purchased. 
B)  3 months or less when purchased. 
C)  6 months or less when purchased. 
D)  1 year or less when purchased.

Question 20

An employee authorized to sign checks should not record

Accepted Answer

A)  owner cash contributions. 
B)  mail receipts. 
C)  cash disbursement transactions. 
D)  sales transactions. 
A)  owner cash contributions. 
B)  mail receipts. 
C)  cash disbursement transactions. 
D)  sales transactions.

For efficiency of operations and better control over cash, a company should maintain only one bank account.

If a petty cash fund is established in the amount of $200, and contains $118 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?

In the month of May, Jansen Company wrote checks in the amount of $39,100. In the June, checks in the amount of $35,000 were written. In May, $37,000 of these checks were presented to the bank for payment, and $32,000 in June. What is the amount of outstanding checks at the end of May?

A bank statement

All of the following would be included as a cash equivalent on the statement of financial position except

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

If a check correctly written and paid by the bank for $517 is incorrectly recorded on the company's books for $571, the appropriate treatment on the bank reconciliation would be to

The control principle related to not having the same person authorize and pay for goods is known as

Quayle Company gathered the following reconciling information in preparing its August bank reconciliation: The adjusted cash balance per books on August 31 is

Wynn Company developed the following reconciling information in preparing its September bank reconciliation: Determine the cash balance per books (before adjustments) for Wynn Company.

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

If employees are bonded

Proper control for over-the-counter cash receipts includes

Petty cash funds are not included in the cash balance reported on the statement of financial position.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of

An employee authorized to sign checks should not record

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting Principles and Contingent Liabilities in Business Operations

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Exam 7: Fraud, Internal Control, and Cash

For efficiency of operations and better control over cash, a company should maintain only one bank account.

If a petty cash fund is established in the amount of $200, and contains $118 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to which of the following accounts?

In the month of May, Jansen Company wrote checks in the amount of $39,100. In the June, checks in the amount of $35,000 were written. In May, $37,000 of these checks were presented to the bank for payment, and $32,000 in June. What is the amount of outstanding checks at the end of May?

A bank statement

All of the following would be included as a cash equivalent on the statement of financial position except

An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of

If a check correctly written and paid by the bank for $517 is incorrectly recorded on the company's books for $571, the appropriate treatment on the bank reconciliation would be to

The control principle related to not having the same person authorize and pay for goods is known as

Quayle Company gathered the following reconciling information in preparing its August bank reconciliation: The adjusted cash balance per books on August 31 is

Wynn Company developed the following reconciling information in preparing its September bank reconciliation: Determine the cash balance per books (before adjustments) for Wynn Company.

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

If employees are bonded

Proper control for over-the-counter cash receipts includes

Petty cash funds are not included in the cash balance reported on the statement of financial position.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash with maturities of

An employee authorized to sign checks should not record

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Accounting Principles and Contingent Liabilities in Business Operations

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