Question 1

Notification by the bank that a customer's deposited cheque was returned NSF requires that the depositor make the following adjusting entry:

Accepted Answer

A) dr.Accounts Receivable cr.Cash 
B) dr.Cash cr.Accounts Receivable 
C) dr.Bank Charges Expense cr.Accounts Receivable 
D) No adjusting entry is necessary. 
A) dr.Accounts Receivable cr.Cash 
B) dr.Cash cr.Accounts Receivable 
C) dr.Bank Charges Expense cr.Accounts Receivable 
D) No adjusting entry is necessary.

Question 2

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

Accepted Answer

A) bank service charge 
B) outstanding cheques 
C) a customer's NSF cheque 
D) electronic payment on account 
A) bank service charge 
B) outstanding cheques 
C) a customer's NSF cheque 
D) electronic payment on account

Question 3

Which of the following is not an adjustment to the cash balance per the bank statement when preparing the bank reconciliation?

Accepted Answer

A) outstanding cheques 
B) EFT 
C) deposits in transit 
D) bank error 
A) outstanding cheques 
B) EFT 
C) deposits in transit 
D) bank error

Question 4

Cash does not include

Accepted Answer

A) currency. 
B) money orders. 
C) post dated cheques. 
D) coins. 
A) currency. 
B) money orders. 
C) post dated cheques. 
D) coins.

Question 5

In large companies, review and reconciliation is often assigned to

Accepted Answer

A) shift supervisors. 
B) management. 
C) internal auditors. 
D) external auditors. 
A) shift supervisors. 
B) management. 
C) internal auditors. 
D) external auditors.

Question 6

NSF cheques received from customers are debited by the bank to the depositor's account.

Accepted Answer

A) True 
 B)False

Question 7

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 8

All of the following are examples of a control activity except

Accepted Answer

A) limited access to assets. 
B) review and reconciliation. 
C) assignment of responsibility. 
D) increasing the speed of collection on receivables. 
A) limited access to assets. 
B) review and reconciliation. 
C) assignment of responsibility. 
D) increasing the speed of collection on receivables.

Question 9

The person responsible for making credit sales should be the vice-president of finance.

Accepted Answer

A) True 
 B)False

Question 10

Control over cash disbursements is improved if all expenditures are paid by cheque or through use of electronic funds transfers.

Accepted Answer

A) True 
 B)False

Question 11

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

Accepted Answer

A) addition to the balance per books 
B) deduction from the balance per books 
C) addition to the balance per bank 
D) deduction from the balance per bank 
A) addition to the balance per books 
B) deduction from the balance per books 
C) addition to the balance per bank 
D) deduction from the balance per bank

Question 12

An effective control activity results when at least two individuals are assigned to one cash drawer so that each can serve as check on the other.

Accepted Answer

A) True 
 B)False

Question 13

On a bank reconciliation, which of the following would be deducted from the balance per bank?

Accepted Answer

A) outstanding cheques 
B) deposits in transit 
C) electronic payment by a customer on account 
D) bank service charges 
A) outstanding cheques 
B) deposits in transit 
C) electronic payment by a customer on account 
D) bank service charges

Question 14

Which of the following would not be included in the determination of cash equivalents?

Accepted Answer

A) bank overdrafts 
B) 90 day Treasury bills 
C) posted dates cheques 
D) money markets 
A) bank overdrafts 
B) 90 day Treasury bills 
C) posted dates cheques 
D) money markets

Question 15

Independent internal reviews should be done

Accepted Answer

A) at the end of each accounting period. 
B) at the end of each month. 
C) periodically on a surprise basis. 
D) by the external auditor. 
A) at the end of each accounting period. 
B) at the end of each month. 
C) periodically on a surprise basis. 
D) by the external auditor.

Question 16

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Accepted Answer

A) True 
 B)False

Question 17

Internal controls are concerned with all of the following except

Accepted Answer

A) computerized systems of accounting. 
B) effective and efficient operations. 
C) ensuring reliable financial reporting. 
D) compliance with relevant laws and regulations. 
A) computerized systems of accounting. 
B) effective and efficient operations. 
C) ensuring reliable financial reporting. 
D) compliance with relevant laws and regulations.

Question 18

Physical controls to safeguard assets do not include

Accepted Answer

A) cashier department supervisors. 
B) vaults. 
C) safety deposit boxes. 
D) locked warehouses. 
A) cashier department supervisors. 
B) vaults. 
C) safety deposit boxes. 
D) locked warehouses.

Question 19

Errors give rise to unintentional misstatements in the financial statements.

Accepted Answer

A) True 
 B)False

Question 20

An employee who makes a sale, ships the goods, and bills the customer violates which control activity?

Accepted Answer

A) review and reconciliation 
B) documentation 
C) segregation of duties 
D) assignment of responsibility 
A) review and reconciliation 
B) documentation 
C) segregation of duties 
D) assignment of responsibility

Notification by the bank that a customer's deposited cheque was returned NSF requires that the depositor make the following adjusting entry:

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

Which of the following is not an adjustment to the cash balance per the bank statement when preparing the bank reconciliation?

Cash does not include

In large companies, review and reconciliation is often assigned to

NSF cheques received from customers are debited by the bank to the depositor's account.

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

All of the following are examples of a control activity except

The person responsible for making credit sales should be the vice-president of finance.

Control over cash disbursements is improved if all expenditures are paid by cheque or through use of electronic funds transfers.

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

An effective control activity results when at least two individuals are assigned to one cash drawer so that each can serve as check on the other.

On a bank reconciliation, which of the following would be deducted from the balance per bank?

Which of the following would not be included in the determination of cash equivalents?

Independent internal reviews should be done

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Internal controls are concerned with all of the following except

Physical controls to safeguard assets do not include

Errors give rise to unintentional misstatements in the financial statements.

An employee who makes a sale, ships the goods, and bills the customer violates which control activity?

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters

Exam 7: Internal Control and Cash

Notification by the bank that a customer's deposited cheque was returned NSF requires that the depositor make the following adjusting entry:

Which of the following bank reconciliation items would not require an adjusting entry on the depositor's books?

Which of the following is not an adjustment to the cash balance per the bank statement when preparing the bank reconciliation?

Cash does not include

In large companies, review and reconciliation is often assigned to

NSF cheques received from customers are debited by the bank to the depositor's account.

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

All of the following are examples of a control activity except

The person responsible for making credit sales should be the vice-president of finance.

Control over cash disbursements is improved if all expenditures are paid by cheque or through use of electronic funds transfers.

An NSF cheque received from a customer should appear in which section of the bank reconciliation?

An effective control activity results when at least two individuals are assigned to one cash drawer so that each can serve as check on the other.

On a bank reconciliation, which of the following would be deducted from the balance per bank?

Which of the following would not be included in the determination of cash equivalents?

Independent internal reviews should be done

All reconciling items in determining the reconciled cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Internal controls are concerned with all of the following except

Physical controls to safeguard assets do not include

Errors give rise to unintentional misstatements in the financial statements.

An employee who makes a sale, ships the goods, and bills the customer violates which control activity?

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters