Question 1

The quick ratio differs from the current ratio:

Accepted Answer

A) Because it excludes short-term investments. 
B) Because liabilities are divided by current assets. 
C) Because it measures profitability. 
D) Because prepaid expenses and inventory are excluded. 
E) Because prepaid expenses and inventory are excluded and because it measures profitability. 
A) Because it excludes short-term investments. 
B) Because liabilities are divided by current assets. 
C) Because it measures profitability. 
D) Because prepaid expenses and inventory are excluded. 
E) Because prepaid expenses and inventory are excluded and because it measures profitability.

Question 2

Match each of the following items with the appropriate internal control principle(s).(a)Establish responsibility.(b)Maintain adequate records.(c)Insure assets and bond employees.(d)Separate recordkeeping from custody of assetsDivide responsibility for related transactions.(f)Apply technological controls.(g)Perform regular and independent reviews._____ (1)The cashier does not have access to the cash register record tape and file.:_____ (2)Z-Mart uses a voucher system._____ (3)Two clerks share the same cash drawer._____ (4)The bookkeeper prepares and signs cheques._____ (5)Z-Mart uses a computerized point of sale system._____ (6)Z-Mart hires Nelson and McGuire, CAs, to perform an audit._____ (7)Z-Mart buys an insurance policy to protect against employee theft._____ (8)Z-Mart has separate departments for purchasing, receiving, and accounts payable._____ (9)Z-Mart has an internal auditor on staff._____ (10)Z-Mart uses a cheque protector.

Accepted Answer

(1) a, d (2) e, b (3

Question 3

Cash, short-term investments, inventory, and receivables, are called quick assets.

Accepted Answer

A) True 
 B)False

Question 4

The bank statement and relevant portions of Quest Company's cash records forthe month ended July 31, 2015 are given below.     Notes:Cheque #618 was recorded incorrectly by the bookkeeper for supplies purchase. Cheque #622 was recorded incorrectly by the bank.Prepare the bank reconciliation at July 31, 2015.

Accepted Answer

The answer of The bank statement and relevant portions of...

Question 5

Discuss the purpose of an internal control system.

Accepted Answer

An internal control system is the set of

Question 6

Principles of internal control include:

Accepted Answer

A) Maintain adequate records. 
B) Insure assets. 
C) Establish responsibilities. 
D) Bond key employees. 
E) All of these answers are correct. 
A) Maintain adequate records. 
B) Insure assets. 
C) Establish responsibilities. 
D) Bond key employees. 
E) All of these answers are correct.

Question 7

Identify the principles of internal control.

Accepted Answer

Principles of internal control include t

Question 8

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit toAccounts Receivable.

Accepted Answer

A) True 
 B)False

Question 9

Cash equivalents:

Accepted Answer

A) Include chequing accounts. 
B) Include 6-month certificates of deposit. 
C) Are recorded in petty cash. 
D) Are short-term, highly liquid investments. 
E) Are short-term, highly liquid investments and include chequing accounts. 
A) Include chequing accounts. 
B) Include 6-month certificates of deposit. 
C) Are recorded in petty cash. 
D) Are short-term, highly liquid investments. 
E) Are short-term, highly liquid investments and include chequing accounts.

Question 10

Below, preceded by identifying letters, are seven items that would cause XavierSales Company's book balance of cash to differ from its bank statement balance.(a)A service charge made by the bank.(b)A cheque listed as outstanding on the previous month's reconciliation that is still outstanding.(c)A customer's cheque returned by the bank marked "Not SufficientFunds."(d)A deposit consisting solely of cheques which was mailed to the bank on the last day of November and is unrecorded on the November bankstatement.(e)A cheque paid by the bank at its correct $190 amount but recorded in error in the Cheque Register at $109.(f)An unrecorded credit memorandum indicating the bank had collected a note receivable for Xavier Sales Company and deposited the proceeds in the company's account.(g)A cheque written but not yet paid or returned by the bank.Indicate where each item would appear on Xavier Sales Company's bankreconciliation by placing its identifying letter in the parentheses in the proper section of the form below.

Accepted Answer

The answer of Below, preceded by identifying letters, are seven...

Question 11

Guy Company's records revealed the following data for September:   * This error relates to a deposit from a customer on account made on September14. The correct amount of the deposit was $1,322. However, the bookkeeper had recorded it as $1,100.Prepare the general journal entries necessary to correct the Cash balance.

Accepted Answer

The answer of Guy Company's records revealed the following data...

Question 12

Outstanding cheques are cheques that:

Accepted Answer

A) Have been written, recorded on the company books, and sent to the payees, but have not yet been paid by the bank. 
B) Have been written, recorded, sent to the payees, received, and paid by the bank. 
C) Have been issued by the bank. 
D) Are blank cheques. 
E) Have been written and not yet recorded in the company books. 
A) Have been written, recorded on the company books, and sent to the payees, but have not yet been paid by the bank. 
B) Have been written, recorded, sent to the payees, received, and paid by the bank. 
C) Have been issued by the bank. 
D) Are blank cheques. 
E) Have been written and not yet recorded in the company books.

Question 13

Prepare the journal entries resulting from the bank reconciliation.

Accepted Answer

The answer of Prepare the journal entries resulting from the...

Question 14

The entry to record reimbursement of the petty cash fund for postage expense should include:

Accepted Answer

A) A debit to Cash. 
B) A debit to Supplies. 
C) A debit to Petty Cash. 
D) A debit to Cash Short and Over. 
E) A debit to Postage Expense. 
A) A debit to Cash. 
B) A debit to Supplies. 
C) A debit to Petty Cash. 
D) A debit to Cash Short and Over. 
E) A debit to Postage Expense.

Question 15

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Accepted Answer

A) True 
 B)False

Question 16

Bank debit cards get their name from:

Accepted Answer

A) Banks debit your account when they take the money out of it. 
B) The fact that a debit is made to Cash by the business receiving the money. 
C) It is the opposite of a credit card. 
D) The fact that a debit is made to Cash by the business receiving the money and banks debit your account when they take the money out of it. 
E) None of these answers is correct. 
A) Banks debit your account when they take the money out of it. 
B) The fact that a debit is made to Cash by the business receiving the money. 
C) It is the opposite of a credit card. 
D) The fact that a debit is made to Cash by the business receiving the money and banks debit your account when they take the money out of it. 
E) None of these answers is correct.

Question 17

An analysis that explains the difference between the balance of a chequing account shown in the depositor's records and the balance shown on the bank statement is a(n):

Accepted Answer

A) Analysis of debits and credits. 
B) Internal audit. 
C) Bank audit. 
D) Trial reconciliation. 
E) Bank reconciliation. 
A) Analysis of debits and credits. 
B) Internal audit. 
C) Bank audit. 
D) Trial reconciliation. 
E) Bank reconciliation.

Question 18

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques, deposits, and bank service charges to the bank balance.

Accepted Answer

A) True 
 B)False

Question 19

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

Accepted Answer

A) True 
 B)False

Question 20

The owner of Zeke's Landscaping Designs just hired an office manager to handle all the office functions for him. Among other responsibilities, the office manager will handle key accounting functions such as processing customer payments, writing cheques toemployees to pay the payroll, handle daily bank deposits at the bank, pay suppliers, and reconcile the company bank account bank reconciliations. What internal cash controlpractice is being overlooked by the owner?

Accepted Answer

A) Ensuring all cash disbursements are tracked by making payments by cheque. 
B) Separation of cash payment from cash disbursement function. 
C) Performing external audit. 
D) Making daily cash deposits. 
E) Frequent preparation of bank reconciliations. 
A) Ensuring all cash disbursements are tracked by making payments by cheque. 
B) Separation of cash payment from cash disbursement function. 
C) Performing external audit. 
D) Making daily cash deposits. 
E) Frequent preparation of bank reconciliations.

The quick ratio differs from the current ratio:

Cash, short-term investments, inventory, and receivables, are called quick assets.

Discuss the purpose of an internal control system.

Principles of internal control include:

Identify the principles of internal control.

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit toAccounts Receivable.

Cash equivalents:

Outstanding cheques are cheques that:

Prepare the journal entries resulting from the bank reconciliation.

The entry to record reimbursement of the petty cash fund for postage expense should include:

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Bank debit cards get their name from:

An analysis that explains the difference between the balance of a chequing account shown in the depositor's records and the balance shown on the bank statement is a(n):

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques, deposits, and bank service charges to the bank balance.

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

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

The quick ratio differs from the current ratio:

Cash, short-term investments, inventory, and receivables, are called quick assets.

Discuss the purpose of an internal control system.

Principles of internal control include:

Identify the principles of internal control.

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit toAccounts Receivable.

Cash equivalents:

Outstanding cheques are cheques that:

Prepare the journal entries resulting from the bank reconciliation.

The entry to record reimbursement of the petty cash fund for postage expense should include:

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Bank debit cards get their name from:

An analysis that explains the difference between the balance of a chequing account shown in the depositor's records and the balance shown on the bank statement is a(n):

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques, deposits, and bank service charges to the bank balance.

Firewalls and encryption can be used as methods to eliminate some of the risks involved in e-commerce.

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