Question 1

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

Accepted Answer

A)  debit Other Income; credit Cash 
B)  debit Cash; credit Other Income 
C)  debit Cash; credit Accounts Receivable 
D)  debit Accounts Receivable; credit Cash 
A)  debit Other Income; credit Cash 
B)  debit Cash; credit Other Income 
C)  debit Cash; credit Accounts Receivable 
D)  debit Accounts Receivable; credit Cash

Question 2

The bank reconciliation is an important part of the system of internal controls.

Accepted Answer

A) True 
 B)False

Question 3

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.? $$\begin{array} { | l | r | } 
\hline \text { Cash balance per books, May } 31 & \$ 5,400 \
\hline \text { Deposits in transit } & 375 \
\hline \text { Notes receivable and interest collected by bank } & 650 \
\hline \text { Bank charge for check printing } & 40 \
\hline \text { Outstanding checks } & 2,400 \
\hline \text { NSF check } & 140 \
\hline
\end{array}$$

Accepted Answer

A)  $5,870 
B)  $6,245 
C)  $4,930 
D)  $3,845 
A)  $5,870 
B)  $6,245 
C)  $4,930 
D)  $3,845

Question 4

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Accepted Answer

A) True 
 B)False

Question 5

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 6

Money market accounts, commercial paper, and U.S. Treasury bills are examples of cash equivalents.

Accepted Answer

A) True 
 B)False

Question 7

Consider the following information taken from the cash account. Assume cash payments were 80% of collections.How much was the beginning balance of the cash account? $$\begin{array} { | c | l | } 
\hline \text { Cash } & \
\hline ? ? & \text { Beginning balance } \
\hline \$ 115,375 & \text { Collections } \
\hline ? ? & \text { Disbursements } \
\hline \$ 80,275 & \text { Ending balance } \
\hline
\end{array}$$

Accepted Answer

A)  $57,200 
B)  $92,300 
C)  $103,350 
D)  $35,100 
A)  $57,200 
B)  $92,300 
C)  $103,350 
D)  $35,100

Question 8

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

Accepted Answer

A)  debit Notes Receivable; credit Cash 
B)  debit Cash; credit Miscellaneous Income 
C)  debit Cash; credit Notes Receivable and Interest Revenue 
D)  debit Accounts Receivable; credit Cash 
A)  debit Notes Receivable; credit Cash 
B)  debit Cash; credit Miscellaneous Income 
C)  debit Cash; credit Notes Receivable and Interest Revenue 
D)  debit Accounts Receivable; credit Cash

Question 9

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 10

A business that requires all cash payments be made by check cannot use a petty cash system.

Accepted Answer

A) True 
 B)False

Question 11

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

Accepted Answer

A) True 
 B)False

Question 12

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account.

Accepted Answer

A) True 
 B)False

Question 13

A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to

Accepted Answer

A)  Cash for $20 
B)  Cash Short and Over for $3 
C)  Petty Cash for $190 
D)  Cash for $180 
A)  Cash for $20 
B)  Cash Short and Over for $3 
C)  Petty Cash for $190 
D)  Cash for $180

Question 14

The following selected transactions relate to cash collections for a firm that maintains a $100 change fund at all times. Present entries to record the transactions for each of the two days of cash receipts from sales.
(a)Actual cash in cash register, $5,412.36; cash receipts per cash register tally, $5,413.07.
(b)Actual cash in cash register, $3,712.95; cash receipts per cash register tally, $3,712.16.

Accepted Answer

(a)Cash5,412.36Cash Short and

Question 15

Which of the following is not an element of internal control?

Accepted Answer

A)  risk assessment 
B)  monitoring 
C)  information and communication 
D)  cost-benefit considerations 
A)  risk assessment 
B)  monitoring 
C)  information and communication 
D)  cost-benefit considerations

Question 16

The bank reconciliation

Accepted Answer

A)  should be prepared by an employee who records cash transactions 
B)  is part of the internal control system 
C)  is for information purposes only 
D)  is sent to the bank for verification 
A)  should be prepared by an employee who records cash transactions 
B)  is part of the internal control system 
C)  is for information purposes only 
D)  is sent to the bank for verification

Question 17

Journalize the entries to record the following:?June 1Established a petty cash fund of $200.30The amount of cash in the petty cash fund is now $57. The fund is replenished based on the following receipts: postage, $25; entertainment, $100; and miscellaneous, $20

.?Journal $$\begin{array} { | c | c | c | c | c | } 
\hline \text { Date } & \text { Description } & \begin{array} { c } 
\text { Post. } \
\text { Ref. }
\end{array} & \text { Debit } & \text { Credit } \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of Journalize the entries to record the following:?June...

Question 18

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

Accepted Answer

A)  debit Accounts Payable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  debit Accounts Receivable; credit Cash 
A)  debit Accounts Payable; credit Cash 
B)  debit Cash; credit Accounts Receivable 
C)  debit Cash; credit Accounts Payable 
D)  debit Accounts Receivable; credit Cash

Question 19

The following data were gathered to use in reconciling the bank statement of Build-A-Lot:​ $$\begin{array} { | l | r | } 
\hline \text { Balance per bank } & \$ 14,355 \
\hline \text { Balance per company records } & 14,010 \
\hline \text { Bank service charges } & 80 \
\hline \text { Deposits in transit } & 4,100 \
\hline \text { NSF checks } & 775 \
\hline \text { Outstanding checks } & 5,300 \
\hline
\end{array}$$ Required
(1) What is the adjusted balance on the bank reconciliation?
(2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Accepted Answer

(1) $13,155Bank section reconc

Question 20

Which of the following reflects a weak internal control system?

Accepted Answer

A)  All employees are well supervised. 
B)  A single employee is responsible for comparing a receiving report to an invoice. 
C)  All employees must take their vacations. 
D)  A single employee is responsible for collecting and recording cash. 
A)  All employees are well supervised. 
B)  A single employee is responsible for comparing a receiving report to an invoice. 
C)  All employees must take their vacations. 
D)  A single employee is responsible for collecting and recording cash.

Exam 8: Internal Control and Cash

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

The bank reconciliation is an important part of the system of internal controls.

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

Money market accounts, commercial paper, and U.S. Treasury bills are examples of cash equivalents.

Consider the following information taken from the cash account. Assume cash payments were 80% of collections.How much was the beginning balance of the cash account? Cash ?? Beginning balance \ 115,375 Collections ?? Disbursements \ 80,275 Ending balance

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

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

A business that requires all cash payments be made by check cannot use a petty cash system.

The amount of the "adjusted balance" appearing on the bank reconciliation as of a given date is the amount that is shown on the balance sheet for that date.

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the petty cash account.

A $200 petty cash fund has cash of $20 and receipts of $177. The journal entry to replenish the account would include a credit to

Which of the following is not an element of internal control?

The bank reconciliation

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

Which of the following reflects a weak internal control system?

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

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