Question 1

Cash is listed in the current asset section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 2

The entry to replenish a petty cash fund includes a credit to

Accepted Answer

A)  Petty Cash. 
B)  Cash. 
C)  Freight Out. 
D)  Postage Expense. 
A)  Petty Cash. 
B)  Cash. 
C)  Freight Out. 
D)  Postage Expense.

Question 3

If a petty cash account is short and the fund is replenished, then the account which would be debited is the expense account Cash Over and Short.

Accepted Answer

A) True 
 B)False

Question 4

Responsibility for authorizing and approving transactions must be given to the correct person.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is NOT a party to a cheque?

Accepted Answer

A)  maker 
B)  auditor 
C)  payee 
D)  bank 
A)  maker 
B)  auditor 
C)  payee 
D)  bank

Question 6

An accounts payable clerk also can change the approved supplier master file for purchases. The control activity

Accepted Answer

A)  establishment of responsibility is violated. 
B)  independent check of performance is violated. 
C)  documentation procedures is violated. 
D)  segregation of duties is violated. 
A)  establishment of responsibility is violated. 
B)  independent check of performance is violated. 
C)  documentation procedures is violated. 
D)  segregation of duties is violated.

Question 7

Control activities are the actions that must be taken to respond to risks that threaten reliable financial reporting.

Accepted Answer

A) True 
 B)False

Question 8

The first journal entry to establish a petty cash fund would be to debit Cash and credit Petty Cash.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following transactions are NOT covered by the term "electronic funds transfer"?

Accepted Answer

A)  prepaid smart cards 
B)  debit and credit card transactions 
C)  mail-in cheques 
D)  electronic bill payments using on-line banking 
A)  prepaid smart cards 
B)  debit and credit card transactions 
C)  mail-in cheques 
D)  electronic bill payments using on-line banking

Question 10

Stamping paid invoices "PAID" is an example of which of the following controls?

Accepted Answer

A)  independent checks of performance 
B)  segregation of duties 
C)  documentation procedures 
D)  human resource controls 
A)  independent checks of performance 
B)  segregation of duties 
C)  documentation procedures 
D)  human resource controls

Question 11

Bank errors

Accepted Answer

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

Question 12

Which the following would result in an adjusting journal entry after preparing the bank reconciliation?

Accepted Answer

A)  An error made by the bank for a deposit made in the amount of $650 and recorded as $560 in error. 
B)  Deposit made by the company in the amount of $650. 
C)  EFT receipt from customer on account. 
D)  Outstanding cheque in the amount of $250 issued by the company but not yet cleared by the bank. 
A)  An error made by the bank for a deposit made in the amount of $650 and recorded as $560 in error. 
B)  Deposit made by the company in the amount of $650. 
C)  EFT receipt from customer on account. 
D)  Outstanding cheque in the amount of $250 issued by the company but not yet cleared by the bank.

Question 13

The account to debit when the petty cash is short is

Accepted Answer

A)  Petty Cash. 
B)  Cash. 
C)  Bank Charges. 
D)  Cash Over and Short. 
A)  Petty Cash. 
B)  Cash. 
C)  Bank Charges. 
D)  Cash Over and Short.

Question 14

A cheque marked "NSF" means

Accepted Answer

A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled out. 
D)  not sufficient funds. 
A)  no service fee. 
B)  no signature found. 
C)  not satisfactorily filled out. 
D)  not sufficient funds.

Question 15

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

Accepted Answer

A)  bank service charge 
B)  an electronic funds transfer to the depositor's account 
C)  wiring of funds to other locations 
D)  returned cheques marked NSF 
A)  bank service charge 
B)  an electronic funds transfer to the depositor's account 
C)  wiring of funds to other locations 
D)  returned cheques marked NSF

Question 16

An independent check of performance must be done by the supervisor of the employee as they would be the person who would best understand the duties of the employee.

Accepted Answer

A) True 
 B)False

Question 17

When reporting cash, many companies combine cash with

Accepted Answer

A)  cash equivalents. 
B)  bank overdrafts. 
C)  short-term investments. 
D)  accounts receivable. 
A)  cash equivalents. 
B)  bank overdrafts. 
C)  short-term investments. 
D)  accounts receivable.

Question 18

A deposit made by a company will appear on the bank statement as a

Accepted Answer

A)  debit. 
B)  credit. 
C)  debit memorandum. 
D)  credit memorandum. 
A)  debit. 
B)  credit. 
C)  debit memorandum. 
D)  credit memorandum.

Question 19

Most Canadian companies list cash first on the balance sheet because it is the most liquid of assets.

Accepted Answer

A) True 
 B)False

Question 20

The person who handles the cash and makes the bank deposit should NOT be able to make changes to the sales record in the point-of-sale system.

Accepted Answer

A) True 
 B)False

Cash is listed in the current asset section of the balance sheet.

The entry to replenish a petty cash fund includes a credit to

If a petty cash account is short and the fund is replenished, then the account which would be debited is the expense account Cash Over and Short.

Responsibility for authorizing and approving transactions must be given to the correct person.

Which of the following is NOT a party to a cheque?

An accounts payable clerk also can change the approved supplier master file for purchases. The control activity

Control activities are the actions that must be taken to respond to risks that threaten reliable financial reporting.

The first journal entry to establish a petty cash fund would be to debit Cash and credit Petty Cash.

Which of the following transactions are NOT covered by the term "electronic funds transfer"?

Stamping paid invoices "PAID" is an example of which of the following controls?

Bank errors

Which the following would result in an adjusting journal entry after preparing the bank reconciliation?

The account to debit when the petty cash is short is

A cheque marked "NSF" means

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

An independent check of performance must be done by the supervisor of the employee as they would be the person who would best understand the duties of the employee.

When reporting cash, many companies combine cash with

A deposit made by a company will appear on the bank statement as a

Most Canadian companies list cash first on the balance sheet because it is the most liquid of assets.

The person who handles the cash and makes the bank deposit should NOT be able to make changes to the sales record in the point-of-sale system.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters

Exam 7: Internal Control and Cash

Cash is listed in the current asset section of the balance sheet.

The entry to replenish a petty cash fund includes a credit to

If a petty cash account is short and the fund is replenished, then the account which would be debited is the expense account Cash Over and Short.

Responsibility for authorizing and approving transactions must be given to the correct person.

Which of the following is NOT a party to a cheque?

An accounts payable clerk also can change the approved supplier master file for purchases. The control activity

Control activities are the actions that must be taken to respond to risks that threaten reliable financial reporting.

The first journal entry to establish a petty cash fund would be to debit Cash and credit Petty Cash.

Which of the following transactions are NOT covered by the term "electronic funds transfer"?

Stamping paid invoices "PAID" is an example of which of the following controls?

Bank errors

Which the following would result in an adjusting journal entry after preparing the bank reconciliation?

The account to debit when the petty cash is short is

A cheque marked "NSF" means

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

An independent check of performance must be done by the supervisor of the employee as they would be the person who would best understand the duties of the employee.

When reporting cash, many companies combine cash with

A deposit made by a company will appear on the bank statement as a

Most Canadian companies list cash first on the balance sheet because it is the most liquid of assets.

The person who handles the cash and makes the bank deposit should NOT be able to make changes to the sales record in the point-of-sale system.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Inventory Costing

Accounting for Receivables

Long-Lived Assets

Current Liabilities and Payroll

Filters