Question 1

A bank reconciliation included an outstanding check of $1,300 for the purchase of supplies. The journal entry to record this reconciling item:

Accepted Answer

A) should debit Accounts Receivable and credit Cash for $1,300. 
B) should debit Cash and credit Supplies for $1,300. 
C) should debit Supplies and credit Cash for $1,300. 
D) is not required. 
A) should debit Accounts Receivable and credit Cash for $1,300. 
B) should debit Cash and credit Supplies for $1,300. 
C) should debit Supplies and credit Cash for $1,300. 
D) is not required.

Question 2

If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item should:

Accepted Answer

A) debit Deposit in Transit and credit Cash for $3,700. 
B) debit Accounts Receivable and credit Cash for $3,700. 
C) debit Cash and credit Deposit in Transit for $3,700. 
D) No entry is required. 
A) debit Deposit in Transit and credit Cash for $3,700. 
B) debit Accounts Receivable and credit Cash for $3,700. 
C) debit Cash and credit Deposit in Transit for $3,700. 
D) No entry is required.

Question 3

Employees should be competent, reasonable and ethical.

Accepted Answer

A) True 
 B)False

Question 4

Carla Company's cash balance at the end of the month was $6,500. After comparing the company's records with the monthly bank statement, Carla's accountant identified the following reconciling items: outstanding checks, $800; deposits in transit, $700; bank service charge, $30; NSF check, $500. What is the adjusted bank balance?

Accepted Answer

A) $6,370 
B) $5,970 
C) $6,600 
D) The adjusted bank balance cannot be determined from this information. 
A) $6,370 
B) $5,970 
C) $6,600 
D) The adjusted bank balance cannot be determined from this information.

Question 5

A bank collected $200 on behalf of its customer. The $200 should appear on the bank reconciliation as:

Accepted Answer

A) added to the book balance. 
B) The collection would not appear on the bank reconciliation. 
C) deducted from the book balance. 
D) added to the bank balance. 
A) added to the book balance. 
B) The collection would not appear on the bank reconciliation. 
C) deducted from the book balance. 
D) added to the bank balance.

Question 6

A fund with a small amount of cash on hand for minor disbursements is called a:

Accepted Answer

A) cash fund. 
B) slush fund. 
C) miscellaneous expense fund. 
D) petty cash fund. 
A) cash fund. 
B) slush fund. 
C) miscellaneous expense fund. 
D) petty cash fund.

Question 7

Which of the following is prepared by the accounting department and sent to the vendor who sells the needed merchandise?

Accepted Answer

A) Purchase request 
B) An invoice 
C) Purchase order 
D) None of the above 
A) Purchase request 
B) An invoice 
C) Purchase order 
D) None of the above

Question 8

In a bank reconciliation, an EFT cash payment is:

Accepted Answer

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

Question 9

The AICPA Code of Professional Conduct and the Standards of Ethical Conduct for Management Accountants set the minimum standards of conduct for members of the AICPA.

Accepted Answer

A) True 
 B)False

Question 10

Interest paid by the bank to a company's account should appear on the bank reconciliation as:

Accepted Answer

A) added to the book balance. 
B) added to the bank balance. 
C) deducted from the book balance. 
D) Interest received would not appear on the bank reconciliation. 
A) added to the book balance. 
B) added to the bank balance. 
C) deducted from the book balance. 
D) Interest received would not appear on the bank reconciliation.

Question 11

A payment packet:

Accepted Answer

A) identifies the need for merchandise and begins the purchasing process. 
B) includes the invoice, receiving report, purchase order and purchase request. 
C) reports the arrival of items purchased. 
D) is sent by the purchasing department to the vendor selling the item. 
A) identifies the need for merchandise and begins the purchasing process. 
B) includes the invoice, receiving report, purchase order and purchase request. 
C) reports the arrival of items purchased. 
D) is sent by the purchasing department to the vendor selling the item.

Question 12

One way to guard against a hacker reading a message sent from one company to another over the Internet is to use:

Accepted Answer

A) encryption. 
B) an intrusion protection device. 
C) an incident response procedure. 
D) a firewall. 
A) encryption. 
B) an intrusion protection device. 
C) an incident response procedure. 
D) a firewall.

Question 13

A bank deposit of $450 recorded by the bank as $500 should appear on a bank reconciliation as an):

Accepted Answer

A) addition to the bank balance of $50. 
B) deduction from the book balance of $50. 
C) deduction from the bank balance of $50. 
D) addition to the book balance of $50. 
A) addition to the bank balance of $50. 
B) deduction from the book balance of $50. 
C) deduction from the bank balance of $50. 
D) addition to the book balance of $50.

Question 14

If a bookkeeper mistakenly recorded a disbursement as $810 instead of the correct amount of $180, the error should be shown on the bank reconciliation as an):

Accepted Answer

A) $630 addition to the books. 
B) $630 deduction from the books. 
C) $180 addition to the books. 
D) $180 deduction from the books. 
A) $630 addition to the books. 
B) $630 deduction from the books. 
C) $180 addition to the books. 
D) $180 deduction from the books.

Question 15

Given questionable management oversight, a single individual may perform both the treasurer and controller functions for a corporation.

Accepted Answer

A) True 
 B)False

Question 16

A bank statement compares the company's Cash account to the bank's records.

Accepted Answer

A) True 
 B)False

Question 17

Assuming a beginning cash balance of $2,000, estimated cash receipts of $105,900, and a desired ending cash balance of $3,500, then the estimated cash disbursements are:

Accepted Answer

A) $108,400. 
B) $106,900. 
C) $105,400. 
D) $104,400. 
A) $108,400. 
B) $106,900. 
C) $105,400. 
D) $104,400.

Question 18

Which guideline for ethical judgments is correct?

Accepted Answer

A) Assess the possible outcomes. 
B) Identify the outcomes and unethical issues. 
C) Identify all federal and state tax effects of each alternative. 
D) Both A and B are correct. 
A) Assess the possible outcomes. 
B) Identify the outcomes and unethical issues. 
C) Identify all federal and state tax effects of each alternative. 
D) Both A and B are correct.

Question 19

A bank statement included a NSF check from Kim Fields for $2,100. The journal entry to record this reconciling item should:

Accepted Answer

A) debit NSF and credit Cash for $2,100. 
B) debit Accounts Receivable and credit Cash for $2,100. 
C) debit Cash and credit NSF for $2,100. 
D) debit Cash and credit Accounts Receivable for $2,100. 
A) debit NSF and credit Cash for $2,100. 
B) debit Accounts Receivable and credit Cash for $2,100. 
C) debit Cash and credit NSF for $2,100. 
D) debit Cash and credit Accounts Receivable for $2,100.

Question 20

A compensating balance requires a borrower to maintain a maximum balance in a checking account.

Accepted Answer

A) True 
 B)False

A bank reconciliation included an outstanding check of $1,300 for the purchase of supplies. The journal entry to record this reconciling item:

If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item should:

Employees should be competent, reasonable and ethical.

A bank collected $200 on behalf of its customer. The $200 should appear on the bank reconciliation as:

A fund with a small amount of cash on hand for minor disbursements is called a:

Which of the following is prepared by the accounting department and sent to the vendor who sells the needed merchandise?

In a bank reconciliation, an EFT cash payment is:

The AICPA Code of Professional Conduct and the Standards of Ethical Conduct for Management Accountants set the minimum standards of conduct for members of the AICPA.

Interest paid by the bank to a company's account should appear on the bank reconciliation as:

A payment packet:

One way to guard against a hacker reading a message sent from one company to another over the Internet is to use:

A bank deposit of $450 recorded by the bank as $500 should appear on a bank reconciliation as an):

If a bookkeeper mistakenly recorded a disbursement as $810 instead of the correct amount of $180, the error should be shown on the bank reconciliation as an):

Given questionable management oversight, a single individual may perform both the treasurer and controller functions for a corporation.

A bank statement compares the company's Cash account to the bank's records.

Assuming a beginning cash balance of $2,000, estimated cash receipts of $105,900, and a desired ending cash balance of $3,500, then the estimated cash disbursements are:

Which guideline for ethical judgments is correct?

A bank statement included a NSF check from Kim Fields for $2,100. The journal entry to record this reconciling item should:

A compensating balance requires a borrower to maintain a maximum balance in a checking account.

The Financial Statements

Transaction Analysis

Accrual Accounting and Income

Short-Term Investments Receivables

Inventory and Cost of Goods Sold

Plant Assets and Intangibles

Liabilities

Stockholders Equity

Long-Term Investments and International Operations

The Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Internal Control and Cash

A bank reconciliation included an outstanding check of $1,300 for the purchase of supplies. The journal entry to record this reconciling item:

If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item should:

Employees should be competent, reasonable and ethical.

A bank collected $200 on behalf of its customer. The $200 should appear on the bank reconciliation as:

A fund with a small amount of cash on hand for minor disbursements is called a:

Which of the following is prepared by the accounting department and sent to the vendor who sells the needed merchandise?

In a bank reconciliation, an EFT cash payment is:

The AICPA Code of Professional Conduct and the Standards of Ethical Conduct for Management Accountants set the minimum standards of conduct for members of the AICPA.

Interest paid by the bank to a company's account should appear on the bank reconciliation as:

A payment packet:

One way to guard against a hacker reading a message sent from one company to another over the Internet is to use:

A bank deposit of $450 recorded by the bank as $500 should appear on a bank reconciliation as an):

If a bookkeeper mistakenly recorded a disbursement as $810 instead of the correct amount of $180, the error should be shown on the bank reconciliation as an):

Given questionable management oversight, a single individual may perform both the treasurer and controller functions for a corporation.

A bank statement compares the company's Cash account to the bank's records.

Assuming a beginning cash balance of $2,000, estimated cash receipts of $105,900, and a desired ending cash balance of $3,500, then the estimated cash disbursements are:

Which guideline for ethical judgments is correct?

A bank statement included a NSF check from Kim Fields for $2,100. The journal entry to record this reconciling item should:

A compensating balance requires a borrower to maintain a maximum balance in a checking account.

The Financial Statements

Transaction Analysis

Accrual Accounting and Income

Short-Term Investments Receivables

Inventory and Cost of Goods Sold

Plant Assets and Intangibles

Liabilities

Stockholders Equity

Long-Term Investments and International Operations

The Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters