Question 1

The acid-test ratio is also called the quick ratio.

Accepted Answer

A) True 
 B)False

Question 2

A bank issues a debit memorandum:

Accepted Answer

A) To notify a depositor of an EFT. 
B) To notify a depositor of a deduction from a depositor's account. 
C) To notify a depositor of all increases to the depositor's account. 
D) To notify a depositor of an NSF cheque. 
E) To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque. 
A) To notify a depositor of an EFT. 
B) To notify a depositor of a deduction from a depositor's account. 
C) To notify a depositor of all increases to the depositor's account. 
D) To notify a depositor of an NSF cheque. 
E) To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque.

Question 3

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 4

Maintaining a petty cash fund makes it possible to determine human fraud.

Accepted Answer

A) True 
 B)False

Question 5

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Accepted Answer

The answer of Prepare the bank reconciliation for Nightingale Company...

Question 6

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Accepted Answer

The retailer normally receives payment f

Question 7

Limitations of internal control include:

Accepted Answer

A) Human fraud. 
B) Human error. 
C) Cost-benefit standard. 
D) Human error and fraud. 
E) All of these answers are correct. 
A) Human fraud. 
B) Human error. 
C) Cost-benefit standard. 
D) Human error and fraud. 
E) All of these answers are correct.

Question 8

Risks involved in e-commerce include:

Accepted Answer

A) Missing documents. 
B) Computer viruses. 
C) Firewalls. 
D) Encryption. 
E) All of these answers are correct. 
A) Missing documents. 
B) Computer viruses. 
C) Firewalls. 
D) Encryption. 
E) All of these answers are correct.

Question 9

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Accepted Answer

A) True 
 B)False

Question 10

Internal control procedures:

Accepted Answer

A) Include policies and procedures to safeguard assets. 
B) Eliminate the risk of loss. 
C) Prevent unavoidable losses. 
D) Both eliminate the risk of loss and include policies and procedures to safeguard assets. 
E) All of these answers are correct. 
A) Include policies and procedures to safeguard assets. 
B) Eliminate the risk of loss. 
C) Prevent unavoidable losses. 
D) Both eliminate the risk of loss and include policies and procedures to safeguard assets. 
E) All of these answers are correct.

Question 11

The following information was available for Anderson Company for the month ended May 31, 2015.(a) The book balance at May 31, 2015 was $3,890.22 The bank balance at May 31, 2015 was $5,660.22 Outstanding cheques amounted to $6,310.The May 31st cash receipts of $5,600 were deposited but have not yet(d)appeared on the bank statement.(e)A $50 debit memorandum for cheques printed by the bank was included with the cancelled cheques.A customer's note for $1,000 was collected by the bankinterest on the note was $110.(g)The bank incorrectly recorded a cheque payment of $1,600 as $1,500.Prepare a bank reconciliation for Anderson Company at May 31, 2015.

Accepted Answer

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

Question 12

Discuss the purpose of a bank reconciliation.

Accepted Answer

A bank reconciliation is a procedure des

Question 13

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Accepted Answer

A) Cash Receivable account. 
B) Petty Cash account. 
C) Bank Reconciliation account. 
D) Cash Over and Short account. 
E) Cash Lost account. 
A) Cash Receivable account. 
B) Petty Cash account. 
C) Bank Reconciliation account. 
D) Cash Over and Short account. 
E) Cash Lost account.

Question 14

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Accepted Answer

A) True 
 B)False

Question 15

Banking activities include:

Accepted Answer

A) Chequing. 
B) Bank accounts. 
C) Electronic funds transfer. 
D) Bank deposits. 
E) All of these answers are correct. 
A) Chequing. 
B) Bank accounts. 
C) Electronic funds transfer. 
D) Bank deposits. 
E) All of these answers are correct.

Question 16

The acid-test ratio:

Accepted Answer

A) Measures liquidity. 
B) Measures profitability. 
C) Is also called the quick ratio. 
D) Is also called the quick ratio and measures liquidity. 
E) All of these answers are correct. 
A) Measures liquidity. 
B) Measures profitability. 
C) Is also called the quick ratio. 
D) Is also called the quick ratio and measures liquidity. 
E) All of these answers are correct.

Question 17

The entry necessary to establish a petty cash fund should include:

Accepted Answer

A) A credit to Petty Cash. 
B) A credit to Cash. 
C) A debit to Cash. 
D) A debit to Petty Cash. 
E) A credit to Cash and a debit to Petty Cash. 
A) A credit to Petty Cash. 
B) A credit to Cash. 
C) A debit to Cash. 
D) A debit to Petty Cash. 
E) A credit to Cash and a debit to Petty Cash.

Question 18

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is NOT a principle of internal control?

Accepted Answer

A) Audits should always be conducted by employees internal to the organization. 
B) Responsibility for related transactions should be divided. 
C) Responsibilities should be clearly established. 
D) Assets should be insured and employees bonded. 
E) Adequate records should be maintained. 
A) Audits should always be conducted by employees internal to the organization. 
B) Responsibility for related transactions should be divided. 
C) Responsibilities should be clearly established. 
D) Assets should be insured and employees bonded. 
E) Adequate records should be maintained.

Question 20

Quick assets include cash, inventory, and receivables.

Accepted Answer

A) True 
 B)False

The acid-test ratio is also called the quick ratio.

A bank issues a debit memorandum:

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Maintaining a petty cash fund makes it possible to determine human fraud.

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Limitations of internal control include:

Risks involved in e-commerce include:

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Internal control procedures:

Discuss the purpose of a bank reconciliation.

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Banking activities include:

The acid-test ratio:

The entry necessary to establish a petty cash fund should include:

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Which of the following is NOT a principle of internal control?

Quick assets include cash, inventory, and receivables.

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 acid-test ratio is also called the quick ratio.

A bank issues a debit memorandum:

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Maintaining a petty cash fund makes it possible to determine human fraud.

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Limitations of internal control include:

Risks involved in e-commerce include:

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Internal control procedures:

Discuss the purpose of a bank reconciliation.

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Banking activities include:

The acid-test ratio:

The entry necessary to establish a petty cash fund should include:

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Which of the following is NOT a principle of internal control?

Quick assets include cash, inventory, and receivables.

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