Question 1

A remittance advice attached to a company check provides

Accepted Answer

A)  details about the running cash balance in the checking account. 
B)  the magnetic bank routing numbers. 
C)  the explanation of the purpose of the check. 
D)  the signature space for the maker. 
A)  details about the running cash balance in the checking account. 
B)  the magnetic bank routing numbers. 
C)  the explanation of the purpose of the check. 
D)  the signature space for the maker.

Question 2

In preparing its bank reconciliation for the month of April 2010, Franklin, Inc. has available the following information.   What should be the adjusted cash balance at April 30, 2010?

Accepted Answer

A)  $39,370. 
B)  $38,940. 
C)  $38,490. 
D)  $38,470. 
A)  $39,370. 
B)  $38,940. 
C)  $38,490. 
D)  $38,470.

Question 3

Which one of the following is not an objective of a system of internal controls?

Accepted Answer

A)  Safeguard company assets 
B)  Overstate liabilities in order to be conservative 
C)  Enhance the accuracy and reliability of accounting records 
D)  Reduce the risks of errors 
A)  Safeguard company assets 
B)  Overstate liabilities in order to be conservative 
C)  Enhance the accuracy and reliability of accounting records 
D)  Reduce the risks of errors

Question 4

Fairly Company gathered the following reconciling information in preparing its April bank reconciliation:   The adjusted cash balance per books on April 30 is

Accepted Answer

A)  $9,225. 
B)  $8,820. 
C)  $8,325. 
D)  $9,165. 
A)  $9,225. 
B)  $8,820. 
C)  $8,325. 
D)  $9,165.

Question 5

Identify whether each of the following items would be (a) added to the book balance, (b) deducted from the book balance in a bank reconciliation, (c) added to the bank balance, or (d) deducted from the bank balance.
1. Deposits in transit
2. Bank service charge
3. Collection of note and interest by bank on company's behalf
4. NSF check
5. Outstanding checks

Accepted Answer

1. c
2. b

Question 6

A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93. The entry to replenish the fund would

Accepted Answer

A)  credit Cash Over and Short for $4. 
B)  credit Miscellaneous Revenue for $4. 
C)  debit Cash Over and Short for $4. 
D)  debit Miscellaneous Expense for $4. 
A)  credit Cash Over and Short for $4. 
B)  credit Miscellaneous Revenue for $4. 
C)  debit Cash Over and Short for $4. 
D)  debit Miscellaneous Expense for $4.

Question 7

Personnel who handle cash receipts should have the option of taking a vacation or not.

Accepted Answer

A) True 
 B)False

Question 8

The principles of internal control include all of the following except

Accepted Answer

A)  establishment of responsibility. 
B)  combining of duties. 
C)  physical, mechanical, and electronic controls. 
D)  independent internal verification. 
A)  establishment of responsibility. 
B)  combining of duties. 
C)  physical, mechanical, and electronic controls. 
D)  independent internal verification.

Question 9

Only large companies need to be concerned with a system of internal control.

Accepted Answer

A) True 
 B)False

Question 10

In a voucher system, vouchers are prepared in the accounts receivable department.

Accepted Answer

A) True 
 B)False

Question 11

Rainey Company wrote checks totaling $8,540 during October and $9,325 during November. $8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $635 
B)  $115 
C)  $305 
D)  $990 
A)  $635 
B)  $115 
C)  $305 
D)  $990

Question 12

A voucher is recorded in the ________________ and filed according to the date on which it is to be paid.

Accepted Answer

The answer of A voucher is recorded in the ________________...

Question 13

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

Accepted Answer

A)  establishment of responsibility. 
B)  segregation of duties. 
C)  documentation procedures. 
D)  independent internal verification. 
A)  establishment of responsibility. 
B)  segregation of duties. 
C)  documentation procedures. 
D)  independent internal verification.

Question 14

A $100 petty cash fund has cash of $18 and receipts of $86. The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash for $86. 
B)  credit to Petty Cash for $86. 
C)  credit to Cash Over and Short for $4. 
D)  credit to Cash for $86. 
A)  debit to Cash for $86. 
B)  credit to Petty Cash for $86. 
C)  credit to Cash Over and Short for $4. 
D)  credit to Cash for $86.

Question 15

If a petty cash fund is established in the amount of $200, and contains $120 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

Accepted Answer

A)  Petty Cash, $85. 
B)  Petty Cash, $80. 
C)  Cash, $80; Cash Over and Short, $5. 
D)  Cash, $80. 
A)  Petty Cash, $85. 
B)  Petty Cash, $80. 
C)  Cash, $80; Cash Over and Short, $5. 
D)  Cash, $80.

Question 16

Tayler Company wrote checks totaling $17,080 during October and $18,650 during November. $16,240 of these checks cleared the bank in October, and $18,220 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $1,270 
B)  $230 
C)  $610 
D)  $1,980 
A)  $1,270 
B)  $230 
C)  $610 
D)  $1,980

Question 17

Mrs. Smith has worked for Grand Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

Accepted Answer

A)  other controls. 
B)  establishment of responsibility. 
C)  physical controls. 
D)  documentation procedures. 
A)  other controls. 
B)  establishment of responsibility. 
C)  physical controls. 
D)  documentation procedures.

Question 18

Maximum benefit from independent internal verification is obtained when

Accepted Answer

A)  it is made on a pre-announced basis. 
B)  it is done by the employee possessing custody of the asset. 
C)  discrepancies are reported to management. 
D)  it is done at the time of the audit. 
A)  it is made on a pre-announced basis. 
B)  it is done by the employee possessing custody of the asset. 
C)  discrepancies are reported to management. 
D)  it is done at the time of the audit.

Question 19

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

Accepted Answer

safeguard,

Question 20

Replenishing the petty cash fund requires

Accepted Answer

A)  a debit to Cash. 
B)  a credit to Petty Cash. 
C)  a debit to various expense accounts. 
D)  no accounting entry. 
A)  a debit to Cash. 
B)  a credit to Petty Cash. 
C)  a debit to various expense accounts. 
D)  no accounting entry.

Exam 8: Fraud, Internal Control, and Cash

A remittance advice attached to a company check provides

In preparing its bank reconciliation for the month of April 2010, Franklin, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2010?

Which one of the following is not an objective of a system of internal controls?

Fairly Company gathered the following reconciling information in preparing its April bank reconciliation: The adjusted cash balance per books on April 30 is

A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93. The entry to replenish the fund would

Personnel who handle cash receipts should have the option of taking a vacation or not.

The principles of internal control include all of the following except

Only large companies need to be concerned with a system of internal control.

In a voucher system, vouchers are prepared in the accounts receivable department.

Rainey Company wrote checks totaling $8,540 during October and $9,325 during November. $8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November. What was the amount of outstanding checks on November 30?

A voucher is recorded in the ________________ and filed according to the date on which it is to be paid.

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

A $100 petty cash fund has cash of $18 and receipts of $86. The journal entry to replenish the account would include a

If a petty cash fund is established in the amount of $200, and contains $120 in cash and $85 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

Tayler Company wrote checks totaling $17,080 during October and $18,650 during November. $16,240 of these checks cleared the bank in October, and $18,220 cleared the bank in November. What was the amount of outstanding checks on November 30?

Mrs. Smith has worked for Grand Inc., for 20 years without taking a vacation. An internal control feature that would address this situation would be

Maximum benefit from independent internal verification is obtained when

Internal control consists of the related methods and measures adopted to ____________ its assets and enhance the ______________ and ______________ of its accounting records.

Replenishing the petty cash fund requires

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

Internal control consists of the related methods and measures adopted to its assets and enhance the and ____ of its accounting records.