Question 1

The responsibility for ordering receiving and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 2

A debit memorandum issued by the bank ______________ the cash balance in the depositor's account.

Accepted Answer

The answer of A debit memorandum issued by the bank...

Question 3

Internal control is defined in part as a plan that safeguards

Accepted Answer

A)  all balance sheet accounts. 
B)  assets. 
C)  liabilities. 
D)  capital stock. 
A)  all balance sheet accounts. 
B)  assets. 
C)  liabilities. 
D)  capital stock.

Question 4

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Accepted Answer

A) True 
 B)False

Question 5

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

Accepted Answer

A) True 
 B)False

Question 6

A disbursement system that uses wire telephone computers etc. to transfer cash from one location to another is referred to as ______________.

Accepted Answer

electronic

Question 7

Below are descriptions of internal control problems. In the space to the left of each item enter the code letter of the one best internal control principle that is related to the problem described.

Accepted Answer

The answer of Below are descriptions of internal control problems....

Question 8

A $100 petty cash fund has cash of $15 and receipts of $86. The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash for $86. 
B)  credit to Petty Cash for $1. 
C)  credit to Cash Over and Short for $1. 
D)  credit to Cash for $86. 
A)  debit to Cash for $86. 
B)  credit to Petty Cash for $1. 
C)  credit to Cash Over and Short for $1. 
D)  credit to Cash for $86.

Question 9

The custodian of a company asset should

Accepted Answer

A)  have access to the accounting records for that asset. 
B)  be someone outside the company. 
C)  not have access to the accounting records for that asset. 
D)  be an accountant. 
A)  have access to the accounting records for that asset. 
B)  be someone outside the company. 
C)  not have access to the accounting records for that asset. 
D)  be an accountant.

Question 10

Match between columns
                        Premises: Outstanding checks.
Bank service charge.
Check for $320 correctly written and paid by the bank but incorrectly entered in the cash payments journal for $230.
Deposit in transit.
Bank returns deposited check marked NSF.
Bank collects notes receivable and interest for depositor.
Bank debit memorandum for check printing fees.
Petty cash custodian has $91 in paid petty cash vouchers that have not been reimbursed.
Bank charged a check against the company which should have been charged to another company.
A check for $158 was correctly paid by the bank but was incorrectly entered in the cash payments journal for $185.

Accepted Answer

The Answer of Add to cash balance per books and is...

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

If a petty cash fund is established in the amount of $200 and contains $119 in cash and $86 in receipts for disbursements when it is replenished the journal entry to record replenishment should include credits to the following accounts

Accepted Answer

A)  Petty Cash $84. 
B)  Petty Cash $5. 
C)  Cash $81; Cash Over and Short $5. 
D)  Cash $81. 
A)  Petty Cash $84. 
B)  Petty Cash $5. 
C)  Cash $81; Cash Over and Short $5. 
D)  Cash $81.

Question 15

Bank errors

Accepted Answer

A)  occur because of time lags. 
B)  must be corrected by debits. 
C)  are infrequent in occurrence. 
D)  are corrected by making an adjusting entry on the depositor's books. 
A)  occur because of time lags. 
B)  must be corrected by debits. 
C)  are infrequent in occurrence. 
D)  are corrected by making an adjusting entry on the depositor's books.

Question 16

Match between columns
                        Premises: Included with the bank statement materials was a check from Bob Simpson for $40 stamped "account closed."
A personal deposit by Annie Walker to her personal account in the amount of $300 for dividends on her General Electric common stock was credited to the company account.
The bank statement included a debit memorandum for $22.00 for two books of blank checks for Walker Machine Works.
The bank statement contains a credit memorandum for $24.75 interest on the average checking account balance.
The daily deposits of March 30 and March 31, for $3,362 and $3,125 respectively, were not included in the bank statement postings.
Two checks totaling $316.86, which were outstanding at the end of February, cleared in March and were returned with the March statement.
The bank statement included a credit memorandum dated March 28, 2014, for $45.00 for the monthly interest on a 6-month, $15,000 certificate of deposit that the company owns.
Four checks, #8712, #8716, #8718, #8719, totaling $5,369.65, did not clear the bank during March.
On March 24, 2014, Walker Machine Works delivered to the bank for collection a $2,500, 3-month note from Don Decker. A credit memorandum dated March 29, 2014, indicated the collection of the note and $90.00 of interest.
The bank statement included a debit memorandum for $25.00 for the collection service on the above note and interest.

Accepted Answer

The Answer of Add to the cash balance per books is...

Question 17

Postage stamps on hand are considered to be

Accepted Answer

A)  cash. 
B)  petty cash. 
C)  cash equivalents. 
D)  a prepaid expense. 
A)  cash. 
B)  petty cash. 
C)  cash equivalents. 
D)  a prepaid expense.

Question 18

Choclate Chews Company gathered the following reconciling information in preparing its August bank reconciliation: $$\begin{array} { l r } 
\text { Cash balance per books, } 8 / 31 & \$ 15,900 \
\text { Deposits in transit } & 900 \
\text { Notes receivable and interest collected by bank } & 8,400 \
\text { Bank charge for check printing } & 120 \
\text { Outstanding checks } & 12,000 \
\text { NSF check } & 1,200
\end{array}$$ The adjusted cash balance per books on August 31 is

Accepted Answer

A)  $10980. 
B)  $11880. 
C)  $22980. 
D)  $23880. 
A)  $10980. 
B)  $11880. 
C)  $22980. 
D)  $23880.

Question 19

A voucher system is used by many large companies as a means of controlling cash receipts.

Accepted Answer

A) True 
 B)False

Question 20

Checks received through the mail should

Accepted Answer

A)  immediately be endorsed "For Deposit Only." 
B)  be sent to the accounts receivable subsidiary ledger clerk for immediate posting to the customer's account. 
C)  be cashed at the bank as soon as possible. 
D)  be "rung up" on a cash register immediately. 
A)  immediately be endorsed "For Deposit Only." 
B)  be sent to the accounts receivable subsidiary ledger clerk for immediate posting to the customer's account. 
C)  be cashed at the bank as soon as possible. 
D)  be "rung up" on a cash register immediately.

Exam 8: Fraud, Internal Control, and Cash

The responsibility for ordering receiving and paying for merchandise should be assigned to different individuals.

A debit memorandum issued by the bank ______________ the cash balance in the depositor's account.

Internal control is defined in part as a plan that safeguards

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Cash register overages are deposited in the petty cash fund and cash shortages are made-up from the petty cash fund.

A disbursement system that uses wire telephone computers etc. to transfer cash from one location to another is referred to as ______________.

Below are descriptions of internal control problems. In the space to the left of each item enter the code letter of the one best internal control principle that is related to the problem described.

A $100 petty cash fund has cash of $15 and receipts of $86. The journal entry to replenish the account would include a

The custodian of a company asset should

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

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

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

If a petty cash fund is established in the amount of $200 and contains $119 in cash and $86 in receipts for disbursements when it is replenished the journal entry to record replenishment should include credits to the following accounts

Bank errors

Postage stamps on hand are considered to be

A voucher system is used by many large companies as a means of controlling cash receipts.

Checks received through the mail should

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

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