Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

GAAP, compared to IFRS, tends to be more

Accepted Answer

A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements.
IFRS 
A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements.
IFRS

Question 3

Checks from customers who pay their accounts promptly are called outstanding checks.

Accepted Answer

A) True 
 B)False

Question 4

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 5

Jukebox Company had checks outstanding totaling $10,800 on its June bank reconciliation. In July, Jukebox Company issued checks totaling $77,800. The July bank statement shows that $76,600 in checks cleared the bank in July. A check from one of Jukebox Company's customers in the amount of $1,000 was also returned marked "NSF." The amount of outstanding checks on Jukebox Company's July bank reconciliation should be

Accepted Answer

A)  $1,200. 
B)  $11,000. 
C)  $12,000. 
D)  $13,000. 
A)  $1,200. 
B)  $11,000. 
C)  $12,000. 
D)  $13,000.

Question 6

What percentage of companies worldwide have experienced fraud in a recent two-year period?

Accepted Answer

A)  1% 
B)  10% 
C)  50% 
D)  100%
IFRS 
A)  1% 
B)  10% 
C)  50% 
D)  100%
IFRS

Question 7

Winter Gloves Company had checks outstanding totaling $12,800 on its May bank reconciliation. In June, Winter Gloves Company issued checks totaling $79,800. The July bank statement shows that $71,400 in checks cleared the bank in July. A check from one of Winter Gloves Company's customers in the amount of $2,000 was also returned marked "NSF." The amount of outstanding checks on Winter Gloves Company's July bank reconciliation should be

Accepted Answer

A)  $8,400. 
B)  $19,200. 
C)  $21,200. 
D)  $23,200. 
A)  $8,400. 
B)  $19,200. 
C)  $21,200. 
D)  $23,200.

Question 8

In the month of November, Kinsey Company Inc. 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 December?

Accepted Answer

A)  $2,346 
B)  $7,245 
C)  $7,671 
D)  $10,224 
A)  $2,346 
B)  $7,245 
C)  $7,671 
D)  $10,224

Question 9

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Accepted Answer

A)  $6,000 
B)  $10,000 
C)  $16,000 
D)  $20,000 
A)  $6,000 
B)  $10,000 
C)  $16,000 
D)  $20,000

Question 10

Storing cash in a company safe is an application of which internal control principle?

Accepted Answer

A)  Segregation of duties 
B)  Documentation procedures 
C)  Physical controls 
D)  Establishment of responsibility 
A)  Segregation of duties 
B)  Documentation procedures 
C)  Physical controls 
D)  Establishment of responsibility

Question 11

Postage stamps on hand are considered to be

Accepted Answer

A)  cash. 
B)  petty cash. 
C)  cash equivalents. 
D)  a prepaid expense. 
A)  cash. 
B)  petty cash. 
C)  cash equivalents. 
D)  a prepaid expense.

Question 12

A petty cash fund should be replenished

Accepted Answer

A)  every day. 
B)  at the end of every accounting period. 
C)  once a year. 
D)  as soon as an expense is paid from the fund. 
A)  every day. 
B)  at the end of every accounting period. 
C)  once a year. 
D)  as soon as an expense is paid from the fund.

Question 13

An application of good internal control over cash disbursements is

Accepted Answer

A)  following payment, the approved invoice should be stamped PAID. 
B)  blank checks should be stored in the treasurer's desk. 
C)  each check should be compared with the approved invoice after the check is issued. 
D)  check signers should record the cash disbursements. 
A)  following payment, the approved invoice should be stamped PAID. 
B)  blank checks should be stored in the treasurer's desk. 
C)  each check should be compared with the approved invoice after the check is issued. 
D)  check signers should record the cash disbursements.

Question 14

Compensating balances are a restriction on the use of a company's cash and should be

Accepted Answer

A)  reported as a current asset. 
B)  reported as a noncurrent asset. 
C)  disclosed in the financial statements. 
D)  reported as a reduction of cash. 
A)  reported as a current asset. 
B)  reported as a noncurrent asset. 
C)  disclosed in the financial statements. 
D)  reported as a reduction of cash.

Question 15

When two or more people get together for the purpose of circumventing prescribed controls, it is called

Accepted Answer

A)  a fraud committee. 
B)  collusion. 
C)  a division of duties. 
D)  bonding of employees. 
A)  a fraud committee. 
B)  collusion. 
C)  a division of duties. 
D)  bonding of employees.

Question 16

Two individuals at a retail store work the same cash register. You evaluate this situation as

Accepted Answer

A)  a violation of establishment of responsibility. 
B)  a violation of segregation of duties. 
C)  supporting the establishment of responsibility. 
D)  supporting internal independent verification. 
A)  a violation of establishment of responsibility. 
B)  a violation of segregation of duties. 
C)  supporting the establishment of responsibility. 
D)  supporting internal independent verification.

Question 17

The safeguarding of assets is an objective of a company's system of internal control.

Accepted Answer

A) True 
 B)False

Question 18

All of the following are parties to a check except the

Accepted Answer

A)  bank. 
B)  Federal Reserve. 
C)  maker. 
D)  payee. 
A)  bank. 
B)  Federal Reserve. 
C)  maker. 
D)  payee.

Question 19

A system of internal control

Accepted Answer

A)  is infallible. 
B)  can be rendered ineffective by employee collusion. 
C)  invariably will have costs exceeding benefits. 
D)  is premised on the concept of absolute assurance. 
A)  is infallible. 
B)  can be rendered ineffective by employee collusion. 
C)  invariably will have costs exceeding benefits. 
D)  is premised on the concept of absolute assurance.

Question 20

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

Accepted Answer

A) True 
 B)False

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

GAAP, compared to IFRS, tends to be more

Checks from customers who pay their accounts promptly are called outstanding checks.

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

What percentage of companies worldwide have experienced fraud in a recent two-year period?

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Storing cash in a company safe is an application of which internal control principle?

Postage stamps on hand are considered to be

A petty cash fund should be replenished

An application of good internal control over cash disbursements is

Compensating balances are a restriction on the use of a company's cash and should be

When two or more people get together for the purpose of circumventing prescribed controls, it is called

Two individuals at a retail store work the same cash register. You evaluate this situation as

The safeguarding of assets is an objective of a company's system of internal control.

All of the following are parties to a check except the

A system of internal control

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

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, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters

Exam 7: Fraud, Internal Control, and Cash

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

GAAP, compared to IFRS, tends to be more

Checks from customers who pay their accounts promptly are called outstanding checks.

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

What percentage of companies worldwide have experienced fraud in a recent two-year period?

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Storing cash in a company safe is an application of which internal control principle?

Postage stamps on hand are considered to be

A petty cash fund should be replenished

An application of good internal control over cash disbursements is

Compensating balances are a restriction on the use of a company's cash and should be

When two or more people get together for the purpose of circumventing prescribed controls, it is called

Two individuals at a retail store work the same cash register. You evaluate this situation as

The safeguarding of assets is an objective of a company's system of internal control.

All of the following are parties to a check except the

A system of internal control

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

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, Stock Transactions, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Filters