Question 1

Allowing only the treasurer to sign checks is an example of

Accepted Answer

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

Question 2

Sam's Grocery Store has the following policy.'Only one cashier can have access to a cash drawer.' Which internal control principle supports this policy?

Accepted Answer

A) Documentation procedures. 
B) Segregation of duties. 
C) Physical controls. 
D) Establishment of responsibilities. 
A) Documentation procedures. 
B) Segregation of duties. 
C) Physical controls. 
D) Establishment of responsibilities.

Question 3

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Accepted Answer

A) Accounts Receivable Cash 
B) Cash Accounts Receivable 
C) Miscellaneous Expense Accounts Receivable 
D) No adjusting entry is necessary. 
A) Accounts Receivable Cash 
B) Cash Accounts Receivable 
C) Miscellaneous Expense Accounts Receivable 
D) No adjusting entry is necessary.

Question 4

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

Accepted Answer

A) $15,225. 
B) $14,820. 
C) $14,325. 
D) $15,165. 
A) $15,225. 
B) $14,820. 
C) $14,325. 
D) $15,165.

Question 5

A cash budget contributes to more effective cash management.

Accepted Answer

A) True 
 B)False

Question 6

The petty cash fund eliminates the need for a bank checking account.

Accepted Answer

A) True 
 B)False

Question 7

Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.

Accepted Answer

A) True 
 B)False

Question 8

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

Accepted Answer

A) True 
 B)False

Question 9

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Accepted Answer

A) establishment of responsibility is violated. 
B) independent internal verification is violated. 
C) documentation procedures is violated. 
D) separation of duties is violated. 
A) establishment of responsibility is violated. 
B) independent internal verification is violated. 
C) documentation procedures is violated. 
D) separation of duties is violated.

Question 10

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 11

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months.What is the best action for you to take?

Accepted Answer

A) Void the check.If it has not been cashed in 5 months, it will never be cashed. 
B) Issue a replacement check because you assume the original check has been lost. 
C) Wait 3 more months to give the bank more time to clear the check. 
D) Investigate to determine why the check has not cleared. 
A) Void the check.If it has not been cashed in 5 months, it will never be cashed. 
B) Issue a replacement check because you assume the original check has been lost. 
C) Wait 3 more months to give the bank more time to clear the check. 
D) Investigate to determine why the check has not cleared.

Question 12

Which of the following is not a basic principle of cash management?

Accepted Answer

A) Increase the collection of receivables. 
B) Keep inventory levels high. 
C) Delay payment of liabilities. 
D) Invest idle cash. 
A) Increase the collection of receivables. 
B) Keep inventory levels high. 
C) Delay payment of liabilities. 
D) Invest idle cash.

Question 13

All of the following are true regarding bank statements except

Accepted Answer

A) the bank statement will show a credit for deposits received from a company. 
B) the bank statement balance will always agree with the company recorded balance. 
C) the bank statement is a copy of the bank's records sent to the customer for periodic review. 
D) the bank statement will show a debit if a check is paid for a company issuing the check. 
A) the bank statement will show a credit for deposits received from a company. 
B) the bank statement balance will always agree with the company recorded balance. 
C) the bank statement is a copy of the bank's records sent to the customer for periodic review. 
D) the bank statement will show a debit if a check is paid for a company issuing the check.

Question 14

Which of the following is not a basic principle of cash management?

Accepted Answer

A) Increase the collection of receivables. 
B) Keep inventory levels low. 
C) Pay all liabilities early. 
D) Invest idle cash. 
A) Increase the collection of receivables. 
B) Keep inventory levels low. 
C) Pay all liabilities early. 
D) Invest idle cash.

Question 15

All of the following bank reconciliation items would result in an adjusting entry on the company's books except

Accepted Answer

A) interest earned. 
B) deposits in transit. 
C) fee for collection of note by the bank. 
D) NSF check of a customer. 
A) interest earned. 
B) deposits in transit. 
C) fee for collection of note by the bank. 
D) NSF check of a customer.

Question 16

On a bank statement, paid checks are shown as

Accepted Answer

A) credits. 
B) debits 
C) assets. 
D) liabilities. 
A) credits. 
B) debits 
C) assets. 
D) liabilities.

Question 17

At April 30, Mendoza Company has the following bank information:   What is Mendoza's adjusted cash balance on April 30?

Accepted Answer

A) $3,860. 
B) $3,880. 
C) $3,330. 
D) $3,870. 
A) $3,860. 
B) $3,880. 
C) $3,330. 
D) $3,870.

Question 18

A petty cash fund should be replenished

Accepted Answer

A) every day. 
B) at the end of every accounting period. 
C) once a year. 
D) as soon as an expense is paid from the fund. 
A) every day. 
B) at the end of every accounting period. 
C) once a year. 
D) as soon as an expense is paid from the fund.

Question 19

Which of the following is not an internal control procedure for cash?

Accepted Answer

A) Only designated personnel are authorized to handle cash. 
B) The same individual receives the cash and pays the bills. 
C) Surprise audits of cash on hand should be made occasionally. 
D) Access to cash is limited. 
A) Only designated personnel are authorized to handle cash. 
B) The same individual receives the cash and pays the bills. 
C) Surprise audits of cash on hand should be made occasionally. 
D) Access to cash is limited.

Question 20

Cash equivalents include money market accounts, commercial paper, and U.S.Treasury bills held for ninety days or less.

Accepted Answer

A) True 
 B)False

Allowing only the treasurer to sign checks is an example of

Sam's Grocery Store has the following policy.'Only one cashier can have access to a cash drawer.' Which internal control principle supports this policy?

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

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

A cash budget contributes to more effective cash management.

The petty cash fund eliminates the need for a bank checking account.

Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

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

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months.What is the best action for you to take?

Which of the following is not a basic principle of cash management?

All of the following are true regarding bank statements except

Which of the following is not a basic principle of cash management?

All of the following bank reconciliation items would result in an adjusting entry on the company's books except

On a bank statement, paid checks are shown as

At April 30, Mendoza Company has the following bank information: What is Mendoza's adjusted cash balance on April 30?

A petty cash fund should be replenished

Which of the following is not an internal control procedure for cash?

Cash equivalents include money market accounts, commercial paper, and U.S.Treasury bills held for ninety days or less.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters

Exam 7: Fraud, Internal Control, and Cash

Allowing only the treasurer to sign checks is an example of

Sam's Grocery Store has the following policy.'Only one cashier can have access to a cash drawer.' Which internal control principle supports this policy?

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

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

A cash budget contributes to more effective cash management.

The petty cash fund eliminates the need for a bank checking account.

Requiring employees to take vacations is a weakness in the system of internal controls because it does not promote operational efficiency.

Cash equivalents are highly liquid investments that can be converted into a specific amount of cash.

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

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

While preparing the bank reconciliation, you notice that a check, written by the company for $750, has been outstanding for 5 months.What is the best action for you to take?

Which of the following is not a basic principle of cash management?

All of the following are true regarding bank statements except

Which of the following is not a basic principle of cash management?

All of the following bank reconciliation items would result in an adjusting entry on the company's books except

On a bank statement, paid checks are shown as

At April 30, Mendoza Company has the following bank information: What is Mendoza's adjusted cash balance on April 30?

A petty cash fund should be replenished

Which of the following is not an internal control procedure for cash?

Cash equivalents include money market accounts, commercial paper, and U.S.Treasury bills held for ninety days or less.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters