Question 1

The sum of the cash in the petty cash fund and the total of the petty cash tickets should equal the opening balance in the Cash account at all times.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following items will cause a difference between the book balance and the bank balance?

Accepted Answer

A) Bank collections 
B) Outstanding voided checks 
C) Canceled checks 
D) Deposits in timing 
A) Bank collections 
B) Outstanding voided checks 
C) Canceled checks 
D) Deposits in timing

Question 3

In a bank reconciliation, items recorded by the bank, but not yet recorded by the company, include:

Accepted Answer

A) outstanding checks. 
B) bank collections. 
C) deposits in transit. 
D) both deposits in transit and outstanding checks. 
A) outstanding checks. 
B) bank collections. 
C) deposits in transit. 
D) both deposits in transit and outstanding checks.

Question 4

A cash budget helps a company manage cash by planning for receipts and payments.

Accepted Answer

A) True 
 B)False

Question 5

In a bank reconciliation, a NSF check is:

Accepted Answer

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

Question 6

Where do cash equivalents appear on the balance sheet?

Accepted Answer

A) They are not reported on the balance sheet. 
B) They are reported immediately after Cash. 
C) They are included with Cash Pledged as Collateral. 
D) They are reported in conjunction with Cash. 
A) They are not reported on the balance sheet. 
B) They are reported immediately after Cash. 
C) They are included with Cash Pledged as Collateral. 
D) They are reported in conjunction with Cash.

Question 7

If a bookkeeper mistakenly recorded a disbursement as $36 instead of the correct amount of $63, the error should be shown on the bank reconciliation as a:

Accepted Answer

A) $36 addition to the books. 
B) $27 deduction from the books. 
C) $36 deduction from the books. 
D) $27 addition to the books. 
A) $36 addition to the books. 
B) $27 deduction from the books. 
C) $36 deduction from the books. 
D) $27 addition to the books.

Question 8

A small amount of cash on hand for miscellaneous items is referred to as the Petty Cash fund.

Accepted Answer

A) True 
 B)False

Question 9

In a bank reconciliation, an EFT cash receipt is:

Accepted Answer

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

Question 10

A purchase request:

Accepted Answer

A) includes the invoice, receiving report, purchase order and purchase request. 
B) identifies that the merchandise has been received and ends the purchasing process. 
C) identifies the need for merchandise and begins the purchasing process. 
D) is sent by the purchasing department to the customer who purchases the item. 
A) includes the invoice, receiving report, purchase order and purchase request. 
B) identifies that the merchandise has been received and ends the purchasing process. 
C) identifies the need for merchandise and begins the purchasing process. 
D) is sent by the purchasing department to the customer who purchases the item.

Question 11

Which of the following are controls over cash received in a store?

Accepted Answer

A) The customer should be able to see the amounts entered into the register. 
B) The clerk must have access to the cash register tape. 
C) The cash drawer can be opened only when the sales clerk needs change. 
D) A receipt should not be given to the customer. 
A) The customer should be able to see the amounts entered into the register. 
B) The clerk must have access to the cash register tape. 
C) The cash drawer can be opened only when the sales clerk needs change. 
D) A receipt should not be given to the customer.

Question 12

The effect of the entry to establish the petty cash fund is to:

Accepted Answer

A) decrease Cash and increase Petty Cash. 
B) increase Petty Cash and decrease total assets. 
C) increase Cash and decrease Petty Cash. 
D) decrease Petty Cash and increase total assets. 
A) decrease Cash and increase Petty Cash. 
B) increase Petty Cash and decrease total assets. 
C) increase Cash and decrease Petty Cash. 
D) decrease Petty Cash and increase total assets.

Question 13

Differences between the amount of cash reported on a company's bank statement and the balance in the company's Cash account before the bank reconciliation are primarily due to:

Accepted Answer

A) timing difference in recording transactions. 
B) errors in the accounting process by the company. 
C) differences between the cash basis and accrual basis of accounting. 
D) errors made by the bank. 
A) timing difference in recording transactions. 
B) errors in the accounting process by the company. 
C) differences between the cash basis and accrual basis of accounting. 
D) errors made by the bank.

Question 14

When preparing a bank reconciliation, deposits in transit are subtracted from the balance shown on the bank statement.

Accepted Answer

A) True 
 B)False

Question 15

When preparing a bank reconciliation, which of the following items should be added to the book balance?

Accepted Answer

A) Collection items 
B) Deposits in transit 
C) EFT receipts 
D) Both EFT receipts and collection items 
A) Collection items 
B) Deposits in transit 
C) EFT receipts 
D) Both EFT receipts and collection items

Question 16

Herbert Company deposited $25,000 in its bank on the same day as-but after-the bank prepared Herbert Company's bank statement. The deposit should appear on the bank reconciliation as an) and is called an).

Accepted Answer

A) addition to the bank balance; outstanding deposit 
B) deduction to the bank balance; deposit in transit 
C) addition to the bank balance; deposit in transit 
D) The deposit would not appear on the bank reconciliation. 
A) addition to the bank balance; outstanding deposit 
B) deduction to the bank balance; deposit in transit 
C) addition to the bank balance; deposit in transit 
D) The deposit would not appear on the bank reconciliation.

Question 17

An imprest petty cash fund of $400 was established for minor disbursements. At the end of the month, the fund included petty cash tickets for the purchase of $185 in supplies, $41 for postage, $86 for fuel and a delivery charge of $65. How much cash is required to replenish the fund?

Accepted Answer

A) $226 
B) $377 
C) $312 
D) $ 23 
A) $226 
B) $377 
C) $312 
D) $ 23

Question 18

A purchase order informs a vendor of the company's intention to purchase merchandise.

Accepted Answer

A) True 
 B)False

Question 19

Which characteristic will NOT be found in an effective system of internal control?

Accepted Answer

A) Documents and records 
B) A separation of duties 
C) Competent, reliable, and ethical personnel 
D) A combination of duties 
A) Documents and records 
B) A separation of duties 
C) Competent, reliable, and ethical personnel 
D) A combination of duties

Question 20

Which of the following expresses the order by which documents are prepared in the purchasing process?

Accepted Answer

A) purchase order, purchase request, payment packet, invoice 
B) purchase request, purchase order, receiving report, payment packet 
C) purchase order, receiving report, invoice, payment packet 
D) invoice, receiving report, purchase order, purchase request 
A) purchase order, purchase request, payment packet, invoice 
B) purchase request, purchase order, receiving report, payment packet 
C) purchase order, receiving report, invoice, payment packet 
D) invoice, receiving report, purchase order, purchase request

The sum of the cash in the petty cash fund and the total of the petty cash tickets should equal the opening balance in the Cash account at all times.

Which of the following items will cause a difference between the book balance and the bank balance?

In a bank reconciliation, items recorded by the bank, but not yet recorded by the company, include:

A cash budget helps a company manage cash by planning for receipts and payments.

In a bank reconciliation, a NSF check is:

Where do cash equivalents appear on the balance sheet?

If a bookkeeper mistakenly recorded a disbursement as $36 instead of the correct amount of $63, the error should be shown on the bank reconciliation as a:

A small amount of cash on hand for miscellaneous items is referred to as the Petty Cash fund.

In a bank reconciliation, an EFT cash receipt is:

A purchase request:

Which of the following are controls over cash received in a store?

The effect of the entry to establish the petty cash fund is to:

Differences between the amount of cash reported on a company's bank statement and the balance in the company's Cash account before the bank reconciliation are primarily due to:

When preparing a bank reconciliation, deposits in transit are subtracted from the balance shown on the bank statement.

When preparing a bank reconciliation, which of the following items should be added to the book balance?

Herbert Company deposited $25,000 in its bank on the same day as-but after-the bank prepared Herbert Company's bank statement. The deposit should appear on the bank reconciliation as an) and is called an).

An imprest petty cash fund of $400 was established for minor disbursements. At the end of the month, the fund included petty cash tickets for the purchase of $185 in supplies, $41 for postage, $86 for fuel and a delivery charge of $65. How much cash is required to replenish the fund?

A purchase order informs a vendor of the company's intention to purchase merchandise.

Which characteristic will NOT be found in an effective system of internal control?

Which of the following expresses the order by which documents are prepared in the purchasing process?

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

The sum of the cash in the petty cash fund and the total of the petty cash tickets should equal the opening balance in the Cash account at all times.

Which of the following items will cause a difference between the book balance and the bank balance?

In a bank reconciliation, items recorded by the bank, but not yet recorded by the company, include:

A cash budget helps a company manage cash by planning for receipts and payments.

In a bank reconciliation, a NSF check is:

Where do cash equivalents appear on the balance sheet?

If a bookkeeper mistakenly recorded a disbursement as $36 instead of the correct amount of $63, the error should be shown on the bank reconciliation as a:

A small amount of cash on hand for miscellaneous items is referred to as the Petty Cash fund.

In a bank reconciliation, an EFT cash receipt is:

A purchase request:

Which of the following are controls over cash received in a store?

The effect of the entry to establish the petty cash fund is to:

Differences between the amount of cash reported on a company's bank statement and the balance in the company's Cash account before the bank reconciliation are primarily due to:

When preparing a bank reconciliation, deposits in transit are subtracted from the balance shown on the bank statement.

When preparing a bank reconciliation, which of the following items should be added to the book balance?

Herbert Company deposited $25,000 in its bank on the same day as-but after-the bank prepared Herbert Company's bank statement. The deposit should appear on the bank reconciliation as an) and is called an).

An imprest petty cash fund of $400 was established for minor disbursements. At the end of the month, the fund included petty cash tickets for the purchase of $185 in supplies, $41 for postage, $86 for fuel and a delivery charge of $65. How much cash is required to replenish the fund?

A purchase order informs a vendor of the company's intention to purchase merchandise.

Which characteristic will NOT be found in an effective system of internal control?

Which of the following expresses the order by which documents are prepared in the purchasing process?

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