Question 1

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash consists of cash on hand and demand

Question 2

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Accepted Answer

A) Debit Cash for $62. 
B) Debit Cash Over and Short for $62. 
C) Credit Cash Over and Short for $62. 
D) Credit Cash for $62. 
E) Debit Petty Cash for $62. 
A) Debit Cash for $62. 
B) Debit Cash Over and Short for $62. 
C) Credit Cash Over and Short for $62. 
D) Credit Cash for $62. 
E) Debit Petty Cash for $62.

Question 3

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Accepted Answer

A) True 
 B)False

Question 4

MainCo Company's accounting policies require the company to maintain a petty cashbalance of $235. MainCo's junior accountant reviews the content of the petty cash box at June 30 to find receipts for purchases of office supplies of $40, shipping supplies of $30 and a left over balance in cash of $7.50.What entry would you make to replenish the petty cash fund at June 30?

Accepted Answer

A)   
B)   
C)   
D)   
E)   
A)   
B)   
C)   
D)   
E)

Question 5

Cash receipts are the result of:

Accepted Answer

A) Collection of accounts payable. 
B) Collection of accounts receivable. 
C) Cash sales. 
D) Cash disbursements. 
E) Cash sales and collection of accounts receivable. 
A) Collection of accounts payable. 
B) Collection of accounts receivable. 
C) Cash sales. 
D) Cash disbursements. 
E) Cash sales and collection of accounts receivable.

Question 6

The Cash Over and Short account:

Accepted Answer

A) Is not necessary in a computerized accounting system. 
B) Is used to record a credit balance in the cash account. 
C) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts. 
D) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system. 
E) None of these answers is correct. 
A) Is not necessary in a computerized accounting system. 
B) Is used to record a credit balance in the cash account. 
C) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts. 
D) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system. 
E) None of these answers is correct.

Question 7

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Accepted Answer

A) True 
 B)False

Question 8

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Accepted Answer

A) True 
 B)False

Question 9

A cheque:

Accepted Answer

A) Involves the maker, the payee, and the bank. 
B) Involves the writer, the signers, the casher, and the bank. 
C) Involves the bookkeeper, the payee, and the bank. 
D) Involves the maker and the payee. 
E) Involves the signer, the casher, and the company. 
A) Involves the maker, the payee, and the bank. 
B) Involves the writer, the signers, the casher, and the bank. 
C) Involves the bookkeeper, the payee, and the bank. 
D) Involves the maker and the payee. 
E) Involves the signer, the casher, and the company.

Question 10

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

Accepted Answer

A) True 
 B)False

Question 11

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Accepted Answer

A) True 
 B)False

Question 12

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Accepted Answer

A) True 
 B)False

Question 13

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

Accepted Answer

A) Credit Cash Over and Short for $43. 
B) Credit Petty Cash for $43. 
C) Debit Petty Cash for $43. 
D) Credit Cash for $43. 
E) Debit Cash Over and Short for $43. 
A) Credit Cash Over and Short for $43. 
B) Credit Petty Cash for $43. 
C) Debit Petty Cash for $43. 
D) Credit Cash for $43. 
E) Debit Cash Over and Short for $43.

Question 14

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Accepted Answer

A) True 
 B)False

Question 15

Principles of internal control include:

Accepted Answer

A) Divide responsibilities for related transactions. 
B) Perform regular and independent reviews. 
C) Record purchases using the gross method. 
D) Divide responsibilities for related transactions and perform regular and independent reviews. 
E) All of these answers are correct. 
A) Divide responsibilities for related transactions. 
B) Perform regular and independent reviews. 
C) Record purchases using the gross method. 
D) Divide responsibilities for related transactions and perform regular and independent reviews. 
E) All of these answers are correct.

Question 16

Managers place a high priority on internal control systems because the systems assist managers in the:

Accepted Answer

A) Planning of operations. 
B) Monitoring of employee performance. 
C) Prevention of avoidable losses. 
D) Monitoring of company performance. 
E) All of these answers are correct. 
A) Planning of operations. 
B) Monitoring of employee performance. 
C) Prevention of avoidable losses. 
D) Monitoring of company performance. 
E) All of these answers are correct.

Question 17

What is the main motivation for retailers to accept credit cards or debit cards?

Accepted Answer

The retailer hopes to increase

Question 18

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Accepted Answer

A) True 
 B)False

Question 19

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

Accepted Answer

A) True 
 B)False

Question 20

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

Accepted Answer

A) True 
 B)False

Explain the difference between cash and cash equivalents.

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Cash receipts are the result of:

The Cash Over and Short account:

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

A cheque:

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Principles of internal control include:

Managers place a high priority on internal control systems because the systems assist managers in the:

What is the main motivation for retailers to accept credit cards or debit cards?

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

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

Explain the difference between cash and cash equivalents.

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Cash receipts are the result of:

The Cash Over and Short account:

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

A cheque:

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Principles of internal control include:

Managers place a high priority on internal control systems because the systems assist managers in the:

What is the main motivation for retailers to accept credit cards or debit cards?

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

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