Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Accepted Answer

A) True 
 B)False

Question 3

Two limitations of systems of internal control are the concept of ______________ and the ______________.

Accepted Answer

The answer of Two limitations of systems of internal control...

Question 4

Gabana Inc.'s €100 petty cash fund has cash of €6 and receipts of €91. The journal entry to replenish the account would include

Accepted Answer

A)  credit to Cash Over and Short for €3. 
B)  credit to Petty Cash for €94. 
C)  debit to Cash for €91. 
D)  credit to Cash for €94. 
A)  credit to Cash Over and Short for €3. 
B)  credit to Petty Cash for €94. 
C)  debit to Cash for €91. 
D)  credit to Cash for €94.

Question 5

Internal control consists of all the related methods and measures adopted within an organisation to safeguard its assets, enhance the reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations.

Accepted Answer

A) True 
 B)False

Question 6

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 7

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF82. The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash for CHF82. 
B)  credit to Petty Cash for CHF110. 
C)  debit to Cash Over and Short for CHF1. 
D)  credit to Cash for CHF82. 
A)  debit to Cash for CHF82. 
B)  credit to Petty Cash for CHF110. 
C)  debit to Cash Over and Short for CHF1. 
D)  credit to Cash for CHF82.

Question 8

Cash registers are an important internal control device used in controlling over-the-counter receipts.

Accepted Answer

A) True 
 B)False

Question 9

The following adjusting entries for Pare Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.

Accepted Answer

1. To adjust book balance for error in r

Question 10

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 June?

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 11

Laymon Boat Company's bank statement for the month of September showed a balance per bank of €7,000. The company's Cash account in the general ledger had a balance of €4,667 at September 30. Other information is as follows:
(1) Cash receipts for September 30 recorded on the company's books were €5,000 but this amount does not appear on the bank statement.
(2) The bank statement shows a debit memorandum for €60 for check printing charges.
(3) Check No. 119 payable to Mann Company was recorded in the cash payments journal and cleared the bank for €248. A review of the accounts payable subsidiary ledger shows a €36 credit balance in the account of Mann Company and that the payment to them should have been for €284.
(4) The total amount of checks still outstanding at September 30 amounted to €5,800.
(5) Check No. 138 was correctly written and paid by the bank for €429. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for €492.
(6) The bank returned an NSF check from a customer for €530.
(7) The bank included a credit memorandum for €2,060 which represents collection of a customer's note by the bank for the company; principal amount of the note was €2,000 and interest was €60. Interest has not been accrued.
Instructions
(a) Prepare a bank reconciliation for Laymon Boat Company at September 30.
(b) Prepare any adjusting entries necessary as a result of the bank reconciliation.

Accepted Answer

The answer of Laymon Boat Company's bank statement for the...

Question 12

A deposit ticket is a negotiable instrument that can be transferred to another party by endorsement.

Accepted Answer

A) True 
 B)False

Question 13

Allowing only the treasurer to sign checks is an example of

Accepted Answer

A)  documentation procedures. 
B)  segregation of duties. 
C)  human resource controls. 
D)  establishment of responsibility. 
A)  documentation procedures. 
B)  segregation of duties. 
C)  human resource controls. 
D)  establishment of responsibility.

Question 14

Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the left of each item.

Accepted Answer

1. D 6. A
2. B 7. B

Question 15

There are three parties to a check: (1)_______________, (2)______________, and the (3)______________.

Accepted Answer

The answer of There are three parties to a check:...

Question 16

Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

Accepted Answer

The three main factors that contribute t

Question 17

Controls that enhance the accuracy and reliability of the accounting records are

Accepted Answer

A)  automated controls. 
B)  external controls. 
C)  physical controls. 
D)  human resource. 
A)  automated controls. 
B)  external controls. 
C)  physical controls. 
D)  human resource.

Question 18

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

Accepted Answer

A) True 
 B)False

Question 19

In the month of November, Coler Company wrote checks in the amount of $27,750. In December, checks in the amount of $37,974 were written. In November, $25,404 of these checks were presented to the bank for payment, and $32,649 were presented in December. What is the amount of outstanding checks at the end of November?

Accepted Answer

A)  $5,325 
B)  $2,346 
C)  $7,671 
D)  $10,650 
A)  $5,325 
B)  $2,346 
C)  $7,671 
D)  $10,650

Question 20

Each of the following items affect the cash balance per books except

Accepted Answer

A)  bank service charges. 
B)  notes collected by the bank. 
C)  NSF checks. 
D)  outstanding checks. 
A)  bank service charges. 
B)  notes collected by the bank. 
C)  NSF checks. 
D)  outstanding checks.

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

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Two limitations of systems of internal control are the concept of and the .

Gabana Inc.'s €100 petty cash fund has cash of €6 and receipts of €91. The journal entry to replenish the account would include

Internal control consists of all the related methods and measures adopted within an organisation to safeguard its assets, enhance the reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations.

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF82. The journal entry to replenish the account would include a

Cash registers are an important internal control device used in controlling over-the-counter receipts.

The following adjusting entries for Pare Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.

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 June?

A deposit ticket is a negotiable instrument that can be transferred to another party by endorsement.

Allowing only the treasurer to sign checks is an example of

Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the left of each item.

There are three parties to a check: (1)_, (2), and the (3)__.

Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

Controls that enhance the accuracy and reliability of the accounting records are

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

Each of the following items affect the cash balance per books except

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 and Financial Reporting for Contingent Liabilities and Leases

Filters

Exam 7: Fraud, Internal Control, and Cash

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

An effective system of internal control requires that at least two individuals be assigned to one cash drawer so that each can serve as check on the other.

Two limitations of systems of internal control are the concept of ______________ and the ______________.

Gabana Inc.'s €100 petty cash fund has cash of €6 and receipts of €91. The journal entry to replenish the account would include

Internal control consists of all the related methods and measures adopted within an organisation to safeguard its assets, enhance the reliability of its accounting records, increase efficiency of operations, and ensure compliance with laws and regulations.

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF82. The journal entry to replenish the account would include a

Cash registers are an important internal control device used in controlling over-the-counter receipts.

The following adjusting entries for Pare Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.

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 June?

A deposit ticket is a negotiable instrument that can be transferred to another party by endorsement.

Allowing only the treasurer to sign checks is an example of

Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation. Enter the appropriate code letter in the space to the left of each item.

There are three parties to a check: (1)_______________, (2)______________, and the (3)______________.

Fraud experts often say that there are three primary factors that contribute to employee fraud. Identify the three factors and explain what is meant by each.

Controls that enhance the accuracy and reliability of the accounting records are

Checks received in the mail should be immediately stamped "NSF" to prevent unauthorized cashing of the check.

Each of the following items affect the cash balance per books except

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 and Financial Reporting for Contingent Liabilities and Leases

Filters

Two limitations of systems of internal control are the concept of and the .

There are three parties to a check: (1)_, (2), and the (3)__.