Question 1

The word "ethics" can best be described as:

Accepted Answer

A) company laws. 
B) rules for recording business transactions. 
C) moral principles in human contact. 
D) internal controls. 
A) company laws. 
B) rules for recording business transactions. 
C) moral principles in human contact. 
D) internal controls.

Question 2

If a bookkeeper mistakenly recorded an $85 deposit as $58, the error would be shown on the bank reconciliation as a(n):

Accepted Answer

A) $27 deduction from the book balance. 
B) $85 addition to the book balance. 
C) $27 addition to the book balance. 
D) $85 deduction from the book balance. 
A) $27 deduction from the book balance. 
B) $85 addition to the book balance. 
C) $27 addition to the book balance. 
D) $85 deduction from the book balance.

Question 3

A cheque for the cash purchase of supplies for $329 was recorded on the books as $239. On a bank reconciliation, this will appear as a(n):

Accepted Answer

A) addition to the book balance. 
B) deduction from the book balance. 
C) addition to the bank balance. 
D) deduction from the bank balance. 
A) addition to the book balance. 
B) deduction from the book balance. 
C) addition to the bank balance. 
D) deduction from the bank balance.

Question 4

Designating a corporate controller is an example of which characteristic of internal control?

Accepted Answer

A) separation of duties 
B) competent, reliable, and ethical personnel 
C) proper authorization 
D) assignment of responsibilities 
A) separation of duties 
B) competent, reliable, and ethical personnel 
C) proper authorization 
D) assignment of responsibilities

Question 5

One characteristic of an effective system of internal control is competent, reliable, and ethical personnel.

Accepted Answer

A) True 
 B)False

Question 6

If the bank mistakenly recorded a $92 payment as $29, the error would be shown on the bank reconciliation as a:

Accepted Answer

A) $63 addition to the bank balance. 
B) $92 deduction from the bank balance. 
C) $92 addition to the bank balance. 
D) $63 deduction from the bank balance. 
A) $63 addition to the bank balance. 
B) $92 deduction from the bank balance. 
C) $92 addition to the bank balance. 
D) $63 deduction from the bank balance.

Question 7

The person to whom a cheque is paid is referred to as the maker.

Accepted Answer

A) True 
 B)False

Question 8

Prepare any necessary journal entries based on the following data regarding the bank reconciliation prepared by Ragoon Services on May 31, 2019.
a)Outstanding cheques amount to $1,650.
b)The service charges for May amount to $35.
c)Cheque #665 for $3,640 for the cash purchase of office equipment was erroneously recorded by the bookkeeper as $364.
d)The bank erroneously credited Ragoon Services' account for $300 for a deposit made by Lagoon Company.
e)A deposit ticket correctly prepared for $975 appeared on the bank statement as a deposit for $795.
f)Cheque #650 for $1,000 for utilities expense was erroneously recorded by the bookkeeper as $100.
g)A customer's cheque for $450 was returned with the bank statement and stamped NSF.

Accepted Answer

The answer of Prepare any necessary journal entries based on...

Question 9

Cash equivalents include liquid assets such as term deposits and certificates of deposit.

Accepted Answer

A) True 
 B)False

Question 10

Discuss the characteristics of an effective system of internal control for cash payments by cheque. Include the specifics for a purchase of merchandise for resale.

Accepted Answer

The process begins with the preparation

Question 11

Table 8-2
The petty cash fund had the following petty cash ticket: $$\begin{array} { l r } 
\text { Paper for photocopier } & \$ 100 \
\text { Miscellaneous expense } & 20 \
\text { Freight on inventory purchased. } & 22 \
\text { Postage expense } & \underline{47} \
&\underline{\$ 189}
\end{array}$$
-Refer to Table 8-2. Assume that the business has established a petty cash fund in the amount of $200 and that the amount of cash in the fund at the time of replenishment is $12. The business uses a periodic inventory system.
Prepare the entry to replenish the fund on March 31.

Accepted Answer

The answer of Table 8-2
The petty cash fund had the...

Question 12

Which of the following is not a component of internal control?

Accepted Answer

A) assigning to one individual the responsibility for accounting for and custody of assets 
B) monitoring of controls via internal and external auditors 
C) risk assessment to identify risk areas 
D) effective control environment where importance of internal control is emphasized 
A) assigning to one individual the responsibility for accounting for and custody of assets 
B) monitoring of controls via internal and external auditors 
C) risk assessment to identify risk areas 
D) effective control environment where importance of internal control is emphasized

Question 13

In a large company, the treasurer is responsible for cash management.

Accepted Answer

A) True 
 B)False

Question 14

If a bookkeeper mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a(n):

Accepted Answer

A) $27 deduction from the book balance. 
B) $85 addition to the book balance. 
C) $27 addition to the book balance. 
D) $85 deduction from the book balance. 
A) $27 deduction from the book balance. 
B) $85 addition to the book balance. 
C) $27 addition to the book balance. 
D) $85 deduction from the book balance.

Question 15

Which of the following describes the control environment?

Accepted Answer

A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The control environment is the "tone at the top" of the business. 
C) The control environment is designed to ensure that the business's goals are achieved. 
D) A company must identify its risks. 
A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The control environment is the "tone at the top" of the business. 
C) The control environment is designed to ensure that the business's goals are achieved. 
D) A company must identify its risks.

Question 16

If a cash register tape totalled $18,600 and the cash received was $18,570, the entry to Sales Revenue would be:

Accepted Answer

A) $18,570. 
B) $18,630. 
C) $18,600. 
D) $18,540. 
A) $18,570. 
B) $18,630. 
C) $18,600. 
D) $18,540.

Question 17

Table 8-2
The petty cash fund had the following petty cash ticket: $$\begin{array} { l r } 
\text { Paper for photocopier } & \$ 100 \
\text { Miscellaneous expense } & 20 \
\text { Freight on inventory purchased. } & 22 \
\text { Postage expense } & \underline{47} \
&\underline{\$ 189}
\end{array}$$
-Refer to Table 8-2. Assume that the business has established a petty cash fund in the amount of $200 and that the amount of cash in the fund at the time of replenishment is $8. The business uses a perpetual inventory system.
Prepare the entry to replenish the fund on March 31.

Accepted Answer

The answer of Table 8-2
The petty cash fund had the...

Question 18

In a bank reconciliation, a $400 NSF cheque is:

Accepted Answer

A) deducted from the book balance. 
B) added to the book balance. 
C) deducted from the bank balance. 
D) added to the bank balance. 
A) deducted from the book balance. 
B) added to the book balance. 
C) deducted from the bank balance. 
D) added to the bank balance.

Question 19

To maintain effective internal control, all incoming mail should be opened by a mail room employee who does not have access to the accounting records.

Accepted Answer

A) True 
 B)False

Question 20

Using the following data, compute the book balance for Stronaway Services before the preparation of a bank reconciliation on May 31, 2019:
- The bank statement reveals a balance of $4,463.
- The bank statement indicates service charges of $36.
- Outstanding cheques on May 31, 2019, amount to $11,412.
- Deposits in transit on May 31, 2019, amount to $9,650.
- The bookkeeper mistakenly recorded a $21 cheque payment to a vendor as $210.
- The bank mistakenly recorded a deposit of $5,000 as $50.

Accepted Answer

Adjusted bank balance =
$4,463 - outstan

The word "ethics" can best be described as:

If a bookkeeper mistakenly recorded an $85 deposit as $58, the error would be shown on the bank reconciliation as a(n):

A cheque for the cash purchase of supplies for $329 was recorded on the books as $239. On a bank reconciliation, this will appear as a(n):

Designating a corporate controller is an example of which characteristic of internal control?

One characteristic of an effective system of internal control is competent, reliable, and ethical personnel.

If the bank mistakenly recorded a $92 payment as $29, the error would be shown on the bank reconciliation as a:

The person to whom a cheque is paid is referred to as the maker.

Cash equivalents include liquid assets such as term deposits and certificates of deposit.

Discuss the characteristics of an effective system of internal control for cash payments by cheque. Include the specifics for a purchase of merchandise for resale.

Which of the following is not a component of internal control?

In a large company, the treasurer is responsible for cash management.

If a bookkeeper mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a(n):

Which of the following describes the control environment?

If a cash register tape totalled $18,600 and the cash received was $18,570, the entry to Sales Revenue would be:

In a bank reconciliation, a $400 NSF cheque is:

To maintain effective internal control, all incoming mail should be opened by a mail room employee who does not have access to the accounting records.

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters

Exam 8: Internal Control and Cash

The word "ethics" can best be described as:

If a bookkeeper mistakenly recorded an $85 deposit as $58, the error would be shown on the bank reconciliation as a(n):

A cheque for the cash purchase of supplies for $329 was recorded on the books as $239. On a bank reconciliation, this will appear as a(n):

Designating a corporate controller is an example of which characteristic of internal control?

One characteristic of an effective system of internal control is competent, reliable, and ethical personnel.

If the bank mistakenly recorded a $92 payment as $29, the error would be shown on the bank reconciliation as a:

The person to whom a cheque is paid is referred to as the maker.

Cash equivalents include liquid assets such as term deposits and certificates of deposit.

Discuss the characteristics of an effective system of internal control for cash payments by cheque. Include the specifics for a purchase of merchandise for resale.

Which of the following is not a component of internal control?

In a large company, the treasurer is responsible for cash management.

If a bookkeeper mistakenly recorded a $58 deposit as $85, the error would be shown on the bank reconciliation as a(n):

Which of the following describes the control environment?

If a cash register tape totalled $18,600 and the cash received was $18,570, the entry to Sales Revenue would be:

In a bank reconciliation, a $400 NSF cheque is:

To maintain effective internal control, all incoming mail should be opened by a mail room employee who does not have access to the accounting records.

Accounting and the Business Environment

Recording Business Transactions

Measuring Business Income: The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations and the Accounting Cycle

Accounting for Merchandise Inventory

Accounting Information Systems

Receivables

Property, Plant, and Equipment; Goodwill; and Intangibles

Current Liabilities and Payroll

Filters