Question 1

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 2

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

Accepted Answer

A) True 
 B)False

Question 3

Bacher Company developed the following reconciling information in preparing its September bank reconciliation:   Using the above information, determine the cash balance per books (before adjustments) for the Bacher Company.

Accepted Answer

A) $2,834 
B) $5,480 
C) $8,148 
D) $8,828 
A) $2,834 
B) $5,480 
C) $8,148 
D) $8,828

Question 4

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 5

The cash account shows a balance of $90,000 before reconciliation. The bank statement does not include a deposit of $5,000 made on the last day of the month. The bank statement shows a collection by the bank of $2,400 and a customer's check for $640 was returned because it was NSF. A customer's check for $900 was recorded on the books as $1,080, and a check written for $138 was recorded as $192. The correct balance in the cash account was

Accepted Answer

A) $91,580. 
B) $91,634. 
C) $92,400. 
D) $96,634. 
A) $91,580. 
B) $91,634. 
C) $92,400. 
D) $96,634.

Question 6

Internal control consists of the plan of organization and all of the related methods and measures adopted within a business to (a) safeguard its assets, and (b) enhance the accuracy and reliability of its accounting records.

Accepted Answer

A) True 
 B)False

Question 7

Firms use physical controls primarily to safeguard their assets.

Accepted Answer

A) True 
 B)False

Question 8

Which one of the following is not necessarily a party to a check?

Accepted Answer

A) Maker 
B) Buyer 
C) Payee 
D) Payer 
A) Maker 
B) Buyer 
C) Payee 
D) Payer

Question 9

In preparing its bank reconciliation for the month of April 2015, Haskins, Inc. has available the following information.   What should be the adjusted cash balance at April 30, 2015?

Accepted Answer

A) $34,410. 
B) $34,470. 
C) $35,760. 
D) $35,820. 
A) $34,410. 
B) $34,470. 
C) $35,760. 
D) $35,820.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Allowing only the treasurer to sign checks is an example of

Accepted Answer

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

Question 12

In the month of November, Kinsey Company Inc. wrote checks in the amount of $18,500. In December, checks in the amount of $25,316 were written. In November, $16,936 of these checks were presented to the bank for payment, and $21,766 were presented in December. What is the amount of outstanding checks at the end of November?

Accepted Answer

A) $1,564 
B) $4,830 
C) $5,114 
D) $6,816 
A) $1,564 
B) $4,830 
C) $5,114 
D) $6,816

Question 13

Companies that are subject to, but fail to comply with, the Foreign Corrupt Practices Act of 1977

Accepted Answer

A) may do so legally by obtaining an exemption. 
B) will be automatically dissolved. 
C) may be subject to fines and officer imprisonment. 
D) may be forced to sell their foreign subsidiaries. 
A) may do so legally by obtaining an exemption. 
B) will be automatically dissolved. 
C) may be subject to fines and officer imprisonment. 
D) may be forced to sell their foreign subsidiaries.

Question 14

For accounting purposes, postdated checks (checks payable in the future) are considered to be

Accepted Answer

A) money orders. 
B) cash. 
C) petty cash. 
D) accounts receivable. 
A) money orders. 
B) cash. 
C) petty cash. 
D) accounts receivable.

Question 15

From an internal control standpoint, the asset most susceptible to improper diversion and use is

Accepted Answer

A) prepaid insurance. 
B) cash. 
C) buildings. 
D) land. 
A) prepaid insurance. 
B) cash. 
C) buildings. 
D) land.

Question 16

Which one of the following would not cause a bank to debit a depositor's account?

Accepted Answer

A) Bank service charge 
B) Collection of a note receivable 
C) Wiring of funds to other locations 
D) Checks marked NSF 
A) Bank service charge 
B) Collection of a note receivable 
C) Wiring of funds to other locations 
D) Checks marked NSF

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

A $100 petty cash fund has cash of $16 and receipts of $82. The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for $82. 
B) credit to Petty Cash for $84. 
C) debit to Cash Over and Short for $2. 
D) credit to Cash for $82. 
A) debit to Cash for $82. 
B) credit to Petty Cash for $84. 
C) debit to Cash Over and Short for $2. 
D) credit to Cash for $82.

Question 19

Macrinez Company assembled the following information in completing its July bank reconciliation: balance per bank $22,920; outstanding checks $4,650; deposits in transit $7,500; NSF check $480; bank service charge $150; cash balance per books $26,400. As a result of this reconciliation, Macrinez will

Accepted Answer

A) reduce its cash account by $150. 
B) reduce its cash account by $630. 
C) reduce its cash account by $2,850. 
D) increase its cash account by $330. 
A) reduce its cash account by $150. 
B) reduce its cash account by $630. 
C) reduce its cash account by $2,850. 
D) increase its cash account by $330.

Question 20

A credit balance in Cash Over and Short is reported as a(n)

Accepted Answer

A) asset. 
B) liability. 
C) miscellaneous expense. 
D) miscellaneous revenue. 
A) asset. 
B) liability. 
C) miscellaneous expense. 
D) miscellaneous revenue.

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

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

Bacher Company developed the following reconciling information in preparing its September bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Bacher Company.

All of the following are parties to a check except the

Internal control consists of the plan of organization and all of the related methods and measures adopted within a business to (a) safeguard its assets, and (b) enhance the accuracy and reliability of its accounting records.

Firms use physical controls primarily to safeguard their assets.

Which one of the following is not necessarily a party to a check?

In preparing its bank reconciliation for the month of April 2015, Haskins, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2015?

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

Allowing only the treasurer to sign checks is an example of

Companies that are subject to, but fail to comply with, the Foreign Corrupt Practices Act of 1977

For accounting purposes, postdated checks (checks payable in the future) are considered to be

From an internal control standpoint, the asset most susceptible to improper diversion and use is

Which one of the following would not cause a bank to debit a depositor's account?

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

A $100 petty cash fund has cash of $16 and receipts of $82. The journal entry to replenish the account would include a

A credit balance in Cash Over and Short is reported as a(n)

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

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

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

Bacher Company developed the following reconciling information in preparing its September bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Bacher Company.

All of the following are parties to a check except the

Internal control consists of the plan of organization and all of the related methods and measures adopted within a business to (a) safeguard its assets, and (b) enhance the accuracy and reliability of its accounting records.

Firms use physical controls primarily to safeguard their assets.

Which one of the following is not necessarily a party to a check?

In preparing its bank reconciliation for the month of April 2015, Haskins, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2015?

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

Allowing only the treasurer to sign checks is an example of

Companies that are subject to, but fail to comply with, the Foreign Corrupt Practices Act of 1977

For accounting purposes, postdated checks (checks payable in the future) are considered to be

From an internal control standpoint, the asset most susceptible to improper diversion and use is

Which one of the following would not cause a bank to debit a depositor's account?

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

A $100 petty cash fund has cash of $16 and receipts of $82. The journal entry to replenish the account would include a

A credit balance in Cash Over and Short is reported as a(n)

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