Question 1

Which of the following is not one of the main factors that contribute to fraudulent activity?

Accepted Answer

A) Opportunity. 
B) Incompatible duties. 
C) Financial Pressure. 
D) Rationalization. 
A) Opportunity. 
B) Incompatible duties. 
C) Financial Pressure. 
D) Rationalization.

Question 2

In preparing a bank reconciliation, outstanding checks are

Accepted Answer

A) added to the balance per bank. 
B) deducted from the balance per books. 
C) added to the balance per books. 
D) deducted from the balance per bank. 
A) added to the balance per bank. 
B) deducted from the balance per books. 
C) added to the balance per books. 
D) deducted from the balance per bank.

Question 3

Cash equivalents could include each of the following except

Accepted Answer

A) bank certificates of deposit. 
B) money market funds. 
C) petty cash. 
D) U.S.Treasury bills. 
A) bank certificates of deposit. 
B) money market funds. 
C) petty cash. 
D) U.S.Treasury bills.

Question 4

Journal entries are required by the depositor for all of the following except

Accepted Answer

A) collection of a note receivable. 
B) bank errors. 
C) bank service charges. 
D) an NSF check. 
A) collection of a note receivable. 
B) bank errors. 
C) bank service charges. 
D) an NSF check.

Question 5

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

Accepted Answer

A) $2,450. 
B) $7,550. 
C) $9,550. 
D) $17,000. 
A) $2,450. 
B) $7,550. 
C) $9,550. 
D) $17,000.

Question 6

In the month of May, Kijak Company Inc. wrote checks in the amount of $84,000. In June, checks in the amount of $114,000 were written. In May, $75,000 of these checks were presented to the bank for payment, and $99,000 in June. What is the amount of outstanding checks at the end of May?

Accepted Answer

A) $9,000 
B) $15,000 
C) $24,000 
D) $30,000 
A) $9,000 
B) $15,000 
C) $24,000 
D) $30,000

Question 7

A voucher system is a series of prescribed control procedures

Accepted Answer

A) to check the credit worthiness of customers. 
B) designed to assure that disbursements by check are proper. 
C) which eliminates the need for a sales journal. 
D) specifically designed for small firms who may not have checking accounts. 
A) to check the credit worthiness of customers. 
B) designed to assure that disbursements by check are proper. 
C) which eliminates the need for a sales journal. 
D) specifically designed for small firms who may not have checking accounts.

Question 8

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 9

Internal controls are not designed to safeguard assets from

Accepted Answer

A) natural disasters. 
B) employee theft. 
C) robbery. 
D) unauthorized use. 
A) natural disasters. 
B) employee theft. 
C) robbery. 
D) unauthorized use.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

All of the following would involve a debit memorandum except

Accepted Answer

A) a bank service charge. 
B) an NSF check. 
C) the cost of printing checks. 
D) interest earned. 
A) a bank service charge. 
B) an NSF check. 
C) the cost of printing checks. 
D) interest earned.

Question 12

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

Accepted Answer

A) automated controls. 
B) external controls. 
C) mechanical and electronic controls. 
D) physical controls. 
A) automated controls. 
B) external controls. 
C) mechanical and electronic controls. 
D) physical controls.

Question 13

Using prenumbered checks and having an approved invoice for each check is an example of

Accepted Answer

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

Question 14

A deposit made by a company will appear on the bank statement as a

Accepted Answer

A) debit. 
B) credit. 
C) debit memorandum. 
D) credit memorandum. 
A) debit. 
B) credit. 
C) debit memorandum. 
D) credit memorandum.

Question 15

Cash is defined by IFRS as

Accepted Answer

A) cash on hand. 
B) demand deposits. 
C) cash on hand and demand deposits. 
D) cash on hand, demand deposits, and highly liquid investments. 
A) cash on hand. 
B) demand deposits. 
C) cash on hand and demand deposits. 
D) cash on hand, demand deposits, and highly liquid investments.

Question 16

The cash account shows a balance of $40,000 before reconciliation. The bank statement does not include a deposit of $9,200 made on the last day of the month. The bank statement shows a collection by the bank of $3,960 and a customer's check for $1,300 was returned because it was NSF. A customer's check for $1,380 was recorded on the books as $1,920, and a check written for $318 was recorded as $390. The correct balance in the cash account was

Accepted Answer

A) $42,048. 
B) $42,192. 
C) $43,128. 
D) $51,392. 
A) $42,048. 
B) $42,192. 
C) $43,128. 
D) $51,392.

Question 17

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 18

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.

Question 19

Related buying activities include

Accepted Answer

A) ordering, receiving, paying. 
B) ordering, selling, paying. 
C) ordering, shipping, billing. 
D) selling, shipping, paying. 
A) ordering, receiving, paying. 
B) ordering, selling, paying. 
C) ordering, shipping, billing. 
D) selling, shipping, paying.

Question 20

If the month-end bank statement shows a balance of $72,000, outstanding checks are $54,000, a deposit of $15,000 was in transit at month end, and a check for $3,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

Accepted Answer

A) $33,000. 
B) $36,000. 
C) $72,000. 
D) $114,000. 
A) $33,000. 
B) $36,000. 
C) $72,000. 
D) $114,000.

Which of the following is not one of the main factors that contribute to fraudulent activity?

In preparing a bank reconciliation, outstanding checks are

Cash equivalents could include each of the following except

Journal entries are required by the depositor for all of the following except

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

In the month of May, Kijak Company Inc. wrote checks in the amount of $84,000. In June, checks in the amount of $114,000 were written. In May, $75,000 of these checks were presented to the bank for payment, and $99,000 in June. What is the amount of outstanding checks at the end of May?

A voucher system is a series of prescribed control procedures

Proper control for over-the-counter cash receipts includes

Internal controls are not designed to safeguard assets from

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

All of the following would involve a debit memorandum except

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

Using prenumbered checks and having an approved invoice for each check is an example of

A deposit made by a company will appear on the bank statement as a

Cash is defined by IFRS as

A system of internal control

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

Related buying activities include

If the month-end bank statement shows a balance of $72,000, outstanding checks are $54,000, a deposit of $15,000 was in transit at month end, and a check for $3,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

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Exam 7: Fraud, Internal Control, and Cash

Which of the following is not one of the main factors that contribute to fraudulent activity?

In preparing a bank reconciliation, outstanding checks are

Cash equivalents could include each of the following except

Journal entries are required by the depositor for all of the following except

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

In the month of May, Kijak Company Inc. wrote checks in the amount of $84,000. In June, checks in the amount of $114,000 were written. In May, $75,000 of these checks were presented to the bank for payment, and $99,000 in June. What is the amount of outstanding checks at the end of May?

A voucher system is a series of prescribed control procedures

Proper control for over-the-counter cash receipts includes

Internal controls are not designed to safeguard assets from

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

All of the following would involve a debit memorandum except

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

Using prenumbered checks and having an approved invoice for each check is an example of

A deposit made by a company will appear on the bank statement as a

Cash is defined by IFRS as

A system of internal control

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

Related buying activities include

If the month-end bank statement shows a balance of $72,000, outstanding checks are $54,000, a deposit of $15,000 was in transit at month end, and a check for $3,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

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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