Question 1

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

Accepted Answer

A) True 
 B)False

Question 2

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Bank charges

Accepted Answer

A) Bank statement adjustment 
B) Company books adjustment 
C) Either 
A) Bank statement adjustment 
B) Company books adjustment 
C) Either

Question 3

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Interest revenue

Accepted Answer

A) Bank statement adjustment 
B) Company books adjustment 
C) Either 
A) Bank statement adjustment 
B) Company books adjustment 
C) Either

Question 4

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Outstanding checks

Accepted Answer

A) Bank statement adjustment 
B) Company books adjustment 
C) Either 
A) Bank statement adjustment 
B) Company books adjustment 
C) Either

Question 5

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a (n)

Accepted Answer

A)  addition to the balance per the company's records 
B)  addition to the balance per the bank statement 
C)  deduction from the balance per the bank statement 
D)  deduction from the balance per the company's records 
A)  addition to the balance per the company's records 
B)  addition to the balance per the bank statement 
C)  deduction from the balance per the bank statement 
D)  deduction from the balance per the company's records

Question 6

Match the following elements of internal control:
-Monitoring

Accepted Answer

A) Provides reasonable assurance that business goals will be achieved 
B) Used by management for guiding operations and ensuring compliance with requirements 
C) Overall attitude of management and employees 
D) Used to locate weaknesses and improve controls 
E) Identify, analyze, and assess likeliness of vulnerabilities 
A) Provides reasonable assurance that business goals will be achieved 
B) Used by management for guiding operations and ensuring compliance with requirements 
C) Overall attitude of management and employees 
D) Used to locate weaknesses and improve controls 
E) Identify, analyze, and assess likeliness of vulnerabilities

Question 7

Using the following information, prepare a bank reconciliation for Candace Co. for May 31:
(a)The bank statement balance is $2,936.
(b)The cash account balance is $3,194.
(c)Outstanding checks amounted to $465.
(d)Deposits in transit are $655.
(e)The bank service charge is $50.
(f)A check for $97 for supplies was recorded as $79 in the ledger.

Accepted Answer

? Candace Co.
Bank Reconciliation
May 31

Question 8

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a (n)

Accepted Answer

A)  deduction from the balance per company's records 
B)  addition to the balance per bank statement 
C)  deduction from the balance per bank statement 
D)  addition to the balance per company's records 
A)  deduction from the balance per company's records 
B)  addition to the balance per bank statement 
C)  deduction from the balance per bank statement 
D)  addition to the balance per company's records

Question 9

Scharf Company is a retailer located in a state without sales tax. The following data were given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change.Record the journal entries for EACH cash register to determine the cashier's accuracy. $\begin{array}{lrrrr}&\text { Reg. } 1&\text { Reg. } 2&\text { Reg. } 3&\text { Reg. } 4\
\text { Cash in drawer } & \$ 974.50 & \$ 1,383.66 & \$ 939.46 & \$ 1,137.91 \
\text { Sales reading } & 879.50 & 1,298.16 & 839.46 & 1,030.33 \
\hline \text { Difference }
\end{array}$ ​ $\begin{array}{|c|c|c|}
\hline \text { Description } & \text { Debit } & \text { Credit } \
\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \\hline & & \
\hline
\end{array}$

Accepted Answer

Each cash drawer starts with $

Question 10

The last custodian of the petty cash fund was hospitalized and you have been asked to take stock of the fund and replenish it. When you receive the fund, it has $299 in cash and receipts as follows:​ $$\begin{array} { l r } 
\text { Office supplies } & \$ 295 \
\text { Advertising } & 120 \
\text { Transportation by taxi } & 75
\end{array}$$ The petty cash fund was established to have $800 in it.Based on what you have found, what journal entry should be recorded to replenish the fund?

Accepted Answer

The answer of The last custodian of the petty cash...

Question 11

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 12

The objectives of internal control are to

Accepted Answer

A)  control the internal organization of the Accounting Department personnel and equipment 
B)  provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with 
C)  prevent fraud and promote the social interest of the company 
D)  provide control over "internal-use only" reports and employee internal conduct 
A)  control the internal organization of the Accounting Department personnel and equipment 
B)  provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with 
C)  prevent fraud and promote the social interest of the company 
D)  provide control over "internal-use only" reports and employee internal conduct

Question 13

Identify each of the following reconciling items as 
(a) an addition to the cash balance according to the bank statement, 
(b) a deduction from the cash balance according to the bank statement, 
(c) an addition to the cash balance according to the company's records, or 
(d) a deduction from the cash balance according to the company's records. Assume that none of the transactions reported by bank debit and credit memos have been recorded by the company. Write "entry" by items that will require a journal entry in the company's accounts.
1.Deposits in transit.
2.Bank service charges.
3.NSF check.
4.Outstanding checks.
5.Check for $690 incorrectly recorded by the company as $960.
6.Check for $420 incorrectly recorded by the company as $240.

Accepted Answer

1. (a) an addition to the cash balance a

Question 14

Depositing all cash, checks, etc., in a bank and paying with checks is an internal control procedure over cash.

Accepted Answer

A) True 
 B)False

Question 15

Entries are made to the petty cash account when

Accepted Answer

A)  making payments out of the fund 
B)  recording shortages in the fund 
C)  replenishing the petty cash fund 
D)  establishing the fund 
A)  making payments out of the fund 
B)  recording shortages in the fund 
C)  replenishing the petty cash fund 
D)  establishing the fund

Question 16

The actual cash received during the week ended June 7 for cash sales was $18,632, and the amount indicated by the cash register total was $18,628. Journalize the entry to record the cash receipts and cash sales.​Journal $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Date } & \text { Description } & \begin{array} { c } 
\text { Post. } \
\text { Ref. }
\end{array} & \text { Debit } & \text { Credit } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of The actual cash received during the week...

Question 17

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 18

A $150 petty cash fund has cash of $54 and receipts of $83. The journal entry to replenish the account would include a

Accepted Answer

A)  credit to Petty Cash for $29 
B)  debit to Cash for $83 
C)  debit to Cash Short and Over for $13 
D)  credit to Cash for $54 
A)  credit to Petty Cash for $29 
B)  debit to Cash for $83 
C)  debit to Cash Short and Over for $13 
D)  credit to Cash for $54

Question 19

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following items that appeared on the bank reconciliation did not require a journal entry?

Accepted Answer

A)  bank service charges 
B)  deposits in transit 
C)  NSF checks 
D)  a check for $630, recorded in the check register for $360 
A)  bank service charges 
B)  deposits in transit 
C)  NSF checks 
D)  a check for $630, recorded in the check register for $360

Exam 8: Internal Control and Cash

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

Match each item to a bank statement adjustment, a company books adjustment, or either. -Bank charges

Match each item to a bank statement adjustment, a company books adjustment, or either. -Interest revenue

Match each item to a bank statement adjustment, a company books adjustment, or either. -Outstanding checks

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a (n)

Match the following elements of internal control: -Monitoring

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a (n)

A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.

The objectives of internal control are to

Depositing all cash, checks, etc., in a bank and paying with checks is an internal control procedure over cash.

Entries are made to the petty cash account when

The actual cash received during the week ended June 7 for cash sales was $18,632, and the amount indicated by the cash register total was $18,628. Journalize the entry to record the cash receipts and cash sales.​Journal Date Description Post. Ref. Debit Credit

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

A $150 petty cash fund has cash of $54 and receipts of $83. The journal entry to replenish the account would include a

The Sarbanes-Oxley Act applies only to companies whose stock is traded on public exchanges.

Which of the following items that appeared on the bank reconciliation did not require a journal entry?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

The actual cash received during the week ended June 7 for cash sales was $18,632, and the amount indicated by the cash register total was $18,628. Journalize the entry to record the cash receipts and cash sales.Journal Date Description Post. Ref. Debit Credit