Question 1

When preparing a bank reconciliation, adjustment are made to the bank side and not the ledger (book)side.

Accepted Answer

A) True 
 B)False  False

Question 2

Two clerks sharing the same cash register is a violation of which internal control principle?

Accepted Answer

A) Establish responsibilities. 
B) Maintain adequate records. 
C) Bond key employees. 
D) Apply technological controls. 
E) Insure assets. 
A) Establish responsibilities. 
B) Maintain adequate records. 
C) Bond key employees. 
D) Apply technological controls. 
E) Insure assets. A

Question 3

Cash equivalents:

Accepted Answer

A) Are often combined with cash as a single balance sheet item. 
B) Include short-term investments purchased to increase earnings. 
C) Are readily convertible to a known cash amount. 
D) Are readily convertible to a known cash amount and include short-term investments purchased to increase earnings. 
E) All of these answers are correct. 
A) Are often combined with cash as a single balance sheet item. 
B) Include short-term investments purchased to increase earnings. 
C) Are readily convertible to a known cash amount. 
D) Are readily convertible to a known cash amount and include short-term investments purchased to increase earnings. 
E) All of these answers are correct. E

Question 4

The following information was available for Romney Supply Company for the month ended May 31, 2015.(a)On May 31, 2015 the Cash account of Romney Supply Company had a balance of $35,850.(b)On May 31, 2015 the bank statement indicated a balance of $54,580 The bank reported the collection of a note receivable for Romney of$7,300 including $500 interest.(d)It was observed that the bank statement did not include a deposit of$4,700 made by Romney on May 31 and that cheques totalling $14,930 issued by Romney had not cleared the bank.(e)Romney recorded an insurance expense payment of $150 as $1,500.(f)Service charges of $150 were charged for cheque printing.Prepare the bank reconciliation at May 31, 2015.

Accepted Answer

The answer of The following information was available for Romney...

Question 5

Identify whether each of the following items affects the bank side or the book side of a bank statement reconciliation._____ (1)Bank service charges_____ (2)Outstanding cheques_____ (3)Deposits in transit_____ (4)NSF cheque_____ (5)Interest on a chequing account_____ (6)The bank recorded a cheque for $958The bank printed cheques for the depositor._____ (8)Debit memo_____ (9)Credit memo_____ (10)The bank collected a $1,000 note for the depositor.

Accepted Answer

(1) Book (2) Bank (3

Question 6

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund willinclude a:

Accepted Answer

A) Debit to Cash Short and Over for $10. 
B) Credit to Petty Cash for $165. 
C) Debit to Miscellaneous Expenses for $35. 
D) Debit to Cash for $165. 
E) Credit to Cash for $165. 
A) Debit to Cash Short and Over for $10. 
B) Credit to Petty Cash for $165. 
C) Debit to Miscellaneous Expenses for $35. 
D) Debit to Cash for $165. 
E) Credit to Cash for $165.

Question 7

You just joined XYZ Company as their junior accountantbalance of cash in XYZ's general ledger on June 30?

Accepted Answer

A) $15,470. 
B) $14,285. 
C) $14,570. 
D) $16,470. 
E) $16,703. 
A) $15,470. 
B) $14,285. 
C) $14,570. 
D) $16,470. 
E) $16,703.

Question 8

Good internal control procedures for cash receipts imply that cash receipts by mail should be opened by an accounting employee who is responsible for recording and depositing receipts.

Accepted Answer

A) True 
 B)False

Question 9

Cash equivalents:

Accepted Answer

A) Include chequing accounts. 
B) Are short-term investments that a company invests their cash in to increase their earnings. 
C) Include savings accounts. 
D) Include savings and chequing accounts. 
E) All of these answers are correct. 
A) Include chequing accounts. 
B) Are short-term investments that a company invests their cash in to increase their earnings. 
C) Include savings accounts. 
D) Include savings and chequing accounts. 
E) All of these answers are correct.

Question 10

The quick ratio is current assets divided by current liabilities.

Accepted Answer

A) True 
 B)False

Question 11

Z-Mart made a bank deposit on September 30 that did not appear on September's bank statement. In preparing September's bank reconciliation, the company should:

Accepted Answer

A) Deduct the deposit from the bank statement balance. 
B) Deduct the deposit from September's book balance and add it to October's book balance. 
C) Send the bank a debit memorandum. 
D) Add the deposit to the book balance of cash. 
E) Add the deposit to the bank statement balance. 
A) Deduct the deposit from the bank statement balance. 
B) Deduct the deposit from September's book balance and add it to October's book balance. 
C) Send the bank a debit memorandum. 
D) Add the deposit to the book balance of cash. 
E) Add the deposit to the bank statement balance.

Question 12

The clerk who has access to the cash in the cash register should not have access to the register tape or file.

Accepted Answer

A) True 
 B)False

Question 13

The petty cash fund should be reimbursed at the end of the period even if the fund is not low on money.

Accepted Answer

A) True 
 B)False

Question 14

An internal control system is the policies and procedures that managers use to:

Accepted Answer

A) Ensure reliable accounting. 
B) Encourage adherence to company policies. 
C) Promote efficient operations. 
D) Protect assets. 
E) All of these answers are correct. 
A) Ensure reliable accounting. 
B) Encourage adherence to company policies. 
C) Promote efficient operations. 
D) Protect assets. 
E) All of these answers are correct.

Question 15

In reconciling the bank balance, the amount of an unrecorded bank service charge should be:

Accepted Answer

A) Deducted from the bank balance of cash. 
B) Added to the book balance of cash. 
C) Deducted from the book balance of cash. 
D) Noted as a memo. 
E) Added to the bank balance of cash. 
A) Deducted from the bank balance of cash. 
B) Added to the book balance of cash. 
C) Deducted from the book balance of cash. 
D) Noted as a memo. 
E) Added to the bank balance of cash.

Question 16

Prepare the Petty Cash Payments Report for January.

Accepted Answer

The answer of Prepare the Petty Cash Payments Report for...

Question 17

Ten days ago a company established a $90 petty cash fund. Today, October 5,the petty cash box contains $3 in cash and the following paid petty cash receipts: transportation-in, $14.25; postage, $34.50; and office supplies, $36. Prepare the general journal entry to reimburse the fund and to increase its size to $150.

Accepted Answer

The answer of Ten days ago a company established a...

Question 18

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month. The entry to replenish the petty cash fund willinclude:

Accepted Answer

A) A credit to Cash for $387.50. 
B) A debit to Cash for $387.50. 
C) A debit to Petty Cash for $382.50. 
D) A credit to Cash Over and Short for $5.00. 
E) A debit to Miscellaneous Expenses for $377.50. 
A) A credit to Cash for $387.50. 
B) A debit to Cash for $387.50. 
C) A debit to Petty Cash for $382.50. 
D) A credit to Cash Over and Short for $5.00. 
E) A debit to Miscellaneous Expenses for $377.50.

Question 19

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Accepted Answer

A) An administrative expense 
B) A discount from revenue used in determining net sales. 
C) A selling expense. 
D) All of these answers are correct. 
E) None of these answers is correct. 
A) An administrative expense 
B) A discount from revenue used in determining net sales. 
C) A selling expense. 
D) All of these answers are correct. 
E) None of these answers is correct.

Question 20

What is the purpose of the petty cash account?

Accepted Answer

The petty cash account is used

When preparing a bank reconciliation, adjustment are made to the bank side and not the ledger (book)side.

Two clerks sharing the same cash register is a violation of which internal control principle?

Cash equivalents:

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund willinclude a:

You just joined XYZ Company as their junior accountantbalance of cash in XYZ's general ledger on June 30?

Good internal control procedures for cash receipts imply that cash receipts by mail should be opened by an accounting employee who is responsible for recording and depositing receipts.

Cash equivalents:

The quick ratio is current assets divided by current liabilities.

Z-Mart made a bank deposit on September 30 that did not appear on September's bank statement. In preparing September's bank reconciliation, the company should:

The clerk who has access to the cash in the cash register should not have access to the register tape or file.

The petty cash fund should be reimbursed at the end of the period even if the fund is not low on money.

An internal control system is the policies and procedures that managers use to:

In reconciling the bank balance, the amount of an unrecorded bank service charge should be:

Prepare the Petty Cash Payments Report for January.

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month. The entry to replenish the petty cash fund willinclude:

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

What is the purpose of the petty cash account?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Receivables

Appendix

Filters

Exam 7: Internal Control and Cash

When preparing a bank reconciliation, adjustment are made to the bank side and not the ledger (book)side.

Two clerks sharing the same cash register is a violation of which internal control principle?

Cash equivalents:

Z-Mart plans to eliminate a $200 petty cash fund. The current balance in the account includes $45 in receipts and $165 in currency. The entry to eliminate the fund willinclude a:

You just joined XYZ Company as their junior accountantbalance of cash in XYZ's general ledger on June 30?

Good internal control procedures for cash receipts imply that cash receipts by mail should be opened by an accounting employee who is responsible for recording and depositing receipts.

Cash equivalents:

The quick ratio is current assets divided by current liabilities.

Z-Mart made a bank deposit on September 30 that did not appear on September's bank statement. In preparing September's bank reconciliation, the company should:

The clerk who has access to the cash in the cash register should not have access to the register tape or file.

The petty cash fund should be reimbursed at the end of the period even if the fund is not low on money.

An internal control system is the policies and procedures that managers use to:

In reconciling the bank balance, the amount of an unrecorded bank service charge should be:

Prepare the Petty Cash Payments Report for January.

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month. The entry to replenish the petty cash fund willinclude:

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

What is the purpose of the petty cash account?

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Inventory Costing and Valuation

Receivables

Appendix

Filters