Question 1

Match the following elements of internal control:
-Information and communication

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 2

The cash account in the company's ledger is a (n)

Accepted Answer

A)  asset with a normal debit balance 
B)  asset with a normal credit balance 
C)  liability with a normal debit balance 
D)  liability with a normal credit balance 
A)  asset with a normal debit balance 
B)  asset with a normal credit balance 
C)  liability with a normal debit balance 
D)  liability with a normal credit balance

Question 3

Pilger Corporation has cash on hand at year-end of $201,000 and a negative cash flow from operations of $144,000. What is the ratio of cash to monthly cash expenses?

Accepted Answer

A)  12.0 months 
B)  7.2 months 
C)  1.4 months 
D)  16.8 months 
A)  12.0 months 
B)  7.2 months 
C)  1.4 months 
D)  16.8 months

Question 4

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Accepted Answer

A) True 
 B)False

Question 5

Accompanying a bank statement for Marsh Land Properties is a credit memo for payment on a $15,000 one-year note receivable and $900 of interest collected by the bank. Marsh Land Properties had been notified by the bank at the time of collection, but had made no entries. Journalize the entry that should be made by Marsh Land to bring the accounting records up to date.

Accepted Answer

\[\begin{array} { l r r} 
\tex

Question 6

Match the following elements of internal control:
-Risk assessment

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

The following procedures were recently implemented at Health Station, Inc. For each procedure, indicate whether the internal control over cash represents 
(1) a strength or  (2) a weakness. If it is a weakness, explain why.?
(a) All mail is opened by the mail clerk, who forwards all cash remittances to the cashier. The cashier prepares alisting of the cash receipts and forwards a copy of the list to the accounts receivable clerk forrecording in the accounts.?
(b) The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supportingdocumentation is forwarded to the treasurer's office for approval.?
(c) At the end of each day, all cash receipts are placed in the bank's night depository.?
(d) The bank reconciliation is prepared by the cashier, who works under the supervision of the treasurer.

Accepted Answer

(a) This is a weakness. The mail clerk s

Question 8

The following procedures were recently implemented at Pampered Pets, Inc. For each procedure, indicate whether the internal control over cash represents 
(1) a strength or 
(2) a weakness. If it is a weakness, explain why.​
(a) At the end of the day, cash register clerks are required to use their own funds to make up any cash shortagesin their registers.​
(b) At the end of the day, an accounting clerk compares the duplicate copy of the daily cash deposit slip with thedeposit receipt obtained from the bank.​
(c) After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails thecheck. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucherand supporting documentation to the accounts payable clerk for filing.​
(d) Along with the petty cash receipts for postage, office supplies, etc., several postdated employeechecks are in the petty cash fund.

Accepted Answer

(a) This is a weakness. Requiring cash r

Question 9

In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 10

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. 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 11

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

Accepted Answer

A) True 
 B)False

Question 12

The actual cash received during the week ended October 31 for cash sales was $23,447, and the amount indicated by the cash register total was $23,457. Journalize the entry to record the cash receipts and cash sales. $$\begin{array}{l}
\text { Journal }\
\begin{array} { | c | c | c | c | c | } 
\hline \text { Date } & \text { Description } & \begin{array} { c } 
\text { Post. } \
\text { Ref. }
\end{array} & \text { Debit } & \text { Credit } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}
\end{array}$$

Accepted Answer

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

Question 13

The debit recorded in the journal to reimburse the petty cash fund is to

Accepted Answer

A)  Petty Cash 
B)  Accounts Receivable 
C)  Cash 
D)  various accounts for which the petty cash was disbursed 
A)  Petty Cash 
B)  Accounts Receivable 
C)  Cash 
D)  various accounts for which the petty cash was disbursed

Question 14

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Note collected by the bank

Accepted Answer

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

Question 15

Sarbanes-Oxley applies to

Accepted Answer

A)  publicly held companies 
B)  not-for-profit organizations 
C)  privately held businesses 
D)  All of these choices 
A)  publicly held companies 
B)  not-for-profit organizations 
C)  privately held businesses 
D)  All of these choices

Question 16

A bank statement

Accepted Answer

A)  is a credit reference letter written by the company's bank 
B)  shows a company the financial position of the bank as of a certain date 
C)  is a bill from the bank for services rendered 
D)  shows the activity that increased or decreased the company's account balance 
A)  is a credit reference letter written by the company's bank 
B)  shows a company the financial position of the bank as of a certain date 
C)  is a bill from the bank for services rendered 
D)  shows the activity that increased or decreased the company's account balance

Question 17

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is 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 18

Consider the following information from the cash account. Assume cash payments were 84% of collections.How much was the beginning balance of the cash account? $$\begin{array} { | c | l | } 
\hline \text { Cash } & \
\hline ? ? & \text { Beg. balance } \
\hline \$ 245,000 & \text { Collections } \
\hline ? ? & \text { Disbursements } \
\hline \$ 80,275 & \text { End. bal ance } \
\hline
\end{array}$$

Accepted Answer

$245,000 × 84% = $20

Question 19

Farm Store, Inc. reported the following data in its December 31 annual report.​ $\begin{array}{lc}
\text { Cash and cash equivalents } & \$ 1,050,000 \
\text { Negative cash flow from operations } & (420,000)
\end{array}$ Required
(a) What is the company's "cash burn" per month?
(b) What is the company's ratio of cash to monthly cash expenses?
(c) Interpret the ratio you computed in part 
b. What are the implications for Farm Store, Inc.?

Accepted Answer

(a) $420,000/12 = $35,000 per month​
(b)

Question 20

Minor Company had checks outstanding totaling $19,200 on its April bank reconciliation. In May, Minor Company issued checks totaling $64,900. The May bank statement shows that $47,600 in checks cleared the bank in May. A check of $300 from one of Minor Company's customers was also returned marked "NSF." The amount of outstanding checks on Minor Company's May bank reconciliation should be

Accepted Answer

A)  $28,400 
B)  $66,800 
C)  $17,300 
D)  $36,500 
A)  $28,400 
B)  $66,800 
C)  $17,300 
D)  $36,500

Match the following elements of internal control: -Information and communication

The cash account in the company's ledger is a (n)

Pilger Corporation has cash on hand at year-end of $201,000 and a negative cash flow from operations of $144,000. What is the ratio of cash to monthly cash expenses?

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Match the following elements of internal control: -Risk assessment

In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a (n)

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

The actual cash received during the week ended October 31 for cash sales was $23,447, and the amount indicated by the cash register total was $23,457. Journalize the entry to record the cash receipts and cash sales. Journal Date Description Post. Ref. Debit Credit

The debit recorded in the journal to reimburse the petty cash fund is to

Match each item to a bank statement adjustment, a company books adjustment, or either. -Note collected by the bank

Sarbanes-Oxley applies to

A bank statement

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a (n)

Consider the following information from the cash account. Assume cash payments were 84% of collections.How much was the beginning balance of the cash account? Cash ?? Beg. balance \ 245,000 Collections ?? Disbursements \ 80,275 End. bal ance

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

Exam 8: Internal Control and Cash

Match the following elements of internal control: -Information and communication

The cash account in the company's ledger is a (n)

Pilger Corporation has cash on hand at year-end of $201,000 and a negative cash flow from operations of $144,000. What is the ratio of cash to monthly cash expenses?

Cash equivalents include short-term investments that will be converted to cash within 120 days.

Match the following elements of internal control: -Risk assessment

In preparing a bank reconciliation, the amount of outstanding checks is added to the balance per bank statement.

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a (n)

The Sarbanes-Oxley Act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.

The actual cash received during the week ended October 31 for cash sales was $23,447, and the amount indicated by the cash register total was $23,457. Journalize the entry to record the cash receipts and cash sales. Journal Date Description Post. Ref. Debit Credit

The debit recorded in the journal to reimburse the petty cash fund is to

Match each item to a bank statement adjustment, a company books adjustment, or either. -Note collected by the bank

Sarbanes-Oxley applies to

A bank statement

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a (n)

Consider the following information from the cash account. Assume cash payments were 84% of collections.How much was the beginning balance of the cash account? Cash ?? Beg. balance \ 245,000 Collections ?? Disbursements \ 80,275 End. bal ance

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