Question 1

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.

Question 2

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 3

A $100 petty cash fund has cash of $17 and receipts of $86. The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for $86. 
B) credit to Petty Cash for $86. 
C) credit to Cash Over and Short for $3. 
D) credit to Cash for $86. 
A) debit to Cash for $86. 
B) credit to Petty Cash for $86. 
C) credit to Cash Over and Short for $3. 
D) credit to Cash for $86.

Question 4

Bank errors

Accepted Answer

A) occur because of time lags. 
B) must be corrected by debits. 
C) are infrequent in occurrence. 
D) are corrected by making an adjusting entry on the depositor's books. 
A) occur because of time lags. 
B) must be corrected by debits. 
C) are infrequent in occurrence. 
D) are corrected by making an adjusting entry on the depositor's books.

Question 5

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 6

The most important element of the fraud triangle is

Accepted Answer

A) financial pressure. 
B) incompatible duties. 
C) opportunity. 
D) rationalization. 
A) financial pressure. 
B) incompatible duties. 
C) opportunity. 
D) rationalization.

Question 7

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 8

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

Question 9

Tangible frauds include

Accepted Answer

A) asset misappropriation. 
B) false pretenses. 
C) counterfeiting. 
D) all of the above. 
A) asset misappropriation. 
B) false pretenses. 
C) counterfeiting. 
D) all of the above.

Question 10

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Accepted Answer

A) $44,100. 
B) $45,000. 
C) $45,900. 
D) $62,100. 
A) $44,100. 
B) $45,000. 
C) $45,900. 
D) $62,100.

Question 11

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 12

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 13

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 14

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A) $645 
B) $1,260 
C) $1,905 
D) $2,355 
A) $645 
B) $1,260 
C) $1,905 
D) $2,355

Question 15

A company stamps checks received in the mail with the words "For Deposit Only". This endorsement is called a(n)

Accepted Answer

A) blank endorsement. 
B) rubber stamp. 
C) restrictive endorsement. 
D) operational endorsement. 
A) blank endorsement. 
B) rubber stamp. 
C) restrictive endorsement. 
D) operational endorsement.

Question 16

Physical controls to safeguard assets do not include

Accepted Answer

A) cashier department supervisors. 
B) vaults. 
C) employee identification badges. 
D) security guards. 
A) cashier department supervisors. 
B) vaults. 
C) employee identification badges. 
D) security guards.

Question 17

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800. As a result of this reconciliation, Carothers will

Accepted Answer

A) reduce its cash account by $50. 
B) reduce its cash account by $210. 
C) reduce its cash account by $950. 
D) increase its cash account by $110. 
A) reduce its cash account by $50. 
B) reduce its cash account by $210. 
C) reduce its cash account by $950. 
D) increase its cash account by $110.

Question 18

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 19

Candy Claws 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) $11,160. 
B) $12,060. 
C) $23,160. 
D) $24,060. 
A) $11,160. 
B) $12,060. 
C) $23,160. 
D) $24,060.

Question 20

Trudy, Inc. had the following bank reconciliation at March 31, 2015:   All reconciling items at March 31, 2015 cleared the bank in April. Outstanding checks at April 30, 2015 totaled $6,000. There were no deposits in transit at April 30, 2015. What is the cash balance per books at April 30, 2015?

Accepted Answer

A) $25,900 
B) $31,900 
C) $34,200 
D) $38,500 
A) $25,900 
B) $31,900 
C) $34,200 
D) $38,500

An employee authorized to sign checks should not record

Postage stamps on hand are considered to be

A $100 petty cash fund has cash of $17 and receipts of $86. The journal entry to replenish the account would include a

Bank errors

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

The most important element of the fraud triangle is

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

GAAP, compared to IFRS, tends to be more

Tangible frauds include

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

IFRS, compared to GAAP, tends to be more

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

A company stamps checks received in the mail with the words "For Deposit Only". This endorsement is called a(n)

Physical controls to safeguard assets do not include

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

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

Trudy, Inc. had the following bank reconciliation at March 31, 2015: All reconciling items at March 31, 2015 cleared the bank in April. Outstanding checks at April 30, 2015 totaled $6,000. There were no deposits in transit at April 30, 2015. What is the cash balance per books at April 30, 2015?

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

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Exam 7: Fraud, Internal Control, and Cash

An employee authorized to sign checks should not record

Postage stamps on hand are considered to be

A $100 petty cash fund has cash of $17 and receipts of $86. The journal entry to replenish the account would include a

Bank errors

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

The most important element of the fraud triangle is

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

GAAP, compared to IFRS, tends to be more

Tangible frauds include

If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

IFRS, compared to GAAP, tends to be more

Hoppmann Company wrote checks totaling $25,620 during October and $27,975 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

A company stamps checks received in the mail with the words "For Deposit Only". This endorsement is called a(n)

Physical controls to safeguard assets do not include

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

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

Trudy, Inc. had the following bank reconciliation at March 31, 2015: All reconciling items at March 31, 2015 cleared the bank in April. Outstanding checks at April 30, 2015 totaled $6,000. There were no deposits in transit at April 30, 2015. What is the cash balance per books at April 30, 2015?

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

Filters