Question 1

When opening incoming mail, the mailroom employee should compare the amount of the check received with the amount shown on the:

Accepted Answer

A) customer order form. 
B) sales invoice. 
C) remittance advice. 
D) purchase order. 
A) customer order form. 
B) sales invoice. 
C) remittance advice. 
D) purchase order.

Question 2

An EFT is an:

Accepted Answer

A) electric funds transfer. 
B) electronic flows transfer. 
C) electronic funds transfer. 
D) emergency funds transfer. 
A) electric funds transfer. 
B) electronic flows transfer. 
C) electronic funds transfer. 
D) emergency funds transfer.

Question 3

In a bank reconciliation, outstanding checks would be added to the book balance.

Accepted Answer

A) True 
 B)False

Question 4

A petty cash system is a system where the total of all receipts less the cash in the box equals the amount of the fund.

Accepted Answer

A) True 
 B)False

Question 5

A cash budget is prepared by subtracting expected cash receipts and adding expected cash disbursements from ending cash on hand.

Accepted Answer

A) True 
 B)False

Question 6

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Alpha Company is the:

Accepted Answer

A) maker. 
B) payer. 
C) payee. 
D) drawer. 
A) maker. 
B) payer. 
C) payee. 
D) drawer.

Question 7

All of the following are purposes of internal control EXCEPT:

Accepted Answer

A) to encourage adherence to company policies. 
B) to ensure accurate and reliable accounts records. 
C) to safeguard assets. 
D) to promote operational inefficiency. 
A) to encourage adherence to company policies. 
B) to ensure accurate and reliable accounts records. 
C) to safeguard assets. 
D) to promote operational inefficiency.

Question 8

Proper segregation of duties increases the chances for fraud and promotes the accuracy of accounting records.

Accepted Answer

A) True 
 B)False

Question 9

Cash equivalents include accounts receivable expected to be collected within 90 days or less.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is the first step in the ethical decision framework?

Accepted Answer

A) Identify the legal issues. 
B) Assess the possible outcomes. 
C) Specify the alternatives. 
D) Identify the ethical issues. 
A) Identify the legal issues. 
B) Assess the possible outcomes. 
C) Specify the alternatives. 
D) Identify the ethical issues.

Question 11

The beginning cash balance is $3,000, estimated cash receipts are $105,000, and estimated cash disbursements are $111,000. How much cash must be borrowed to have a desired ending balance of $5,000?

Accepted Answer

A) $5,000 
B) $2,000 
C) $6,000 
D) $8,000 
A) $5,000 
B) $2,000 
C) $6,000 
D) $8,000

Question 12

The journal entry for a note collected by the bank with interest requires a credit to Cash and a debit to both Notes Receivable and Interest Revenue.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) NSF checks. 
B) bank service charges. 
C) interest. 
D) outstanding checks. 
A) NSF checks. 
B) bank service charges. 
C) interest. 
D) outstanding checks.

Question 14

At the time of payment, what journal entry is required to record a petty cash disbursement for postage?

Accepted Answer

A) debit Postage Expense, credit Petty Cash 
B) debit Petty Cash, credit cash 
C) debit Postage Expense, credit Cash 
D) No journal entry is required. 
A) debit Postage Expense, credit Petty Cash 
B) debit Petty Cash, credit cash 
C) debit Postage Expense, credit Cash 
D) No journal entry is required.

Question 15

A cash budget includes estimated cash:

Accepted Answer

A) receipts and estimated cash disbursements. 
B) disbursements, accounts receivable, accounts payable balances, and tax payments. 
C) receipts, cash disbursements, and non- cash expenses such as depreciation expense. 
D) receipts, accounts receivable, accounts payable balances, and interest payments. 
A) receipts and estimated cash disbursements. 
B) disbursements, accounts receivable, accounts payable balances, and tax payments. 
C) receipts, cash disbursements, and non- cash expenses such as depreciation expense. 
D) receipts, accounts receivable, accounts payable balances, and interest payments.

Question 16

Rotating employees through various jobs is a part of which characteristic of internal control?

Accepted Answer

A) Separation of duties 
B) Competent and reliable personnel 
C) Assignment of responsibilities 
D) Proper authorization 
A) Separation of duties 
B) Competent and reliable personnel 
C) Assignment of responsibilities 
D) Proper authorization

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. If there is $13 left in the fund, how much cash is required to replenish the fund?

Accepted Answer

A) $236 
B) $377 
C) $387 
D) $367 
A) $236 
B) $377 
C) $387 
D) $367

When opening incoming mail, the mailroom employee should compare the amount of the check received with the amount shown on the:

An EFT is an:

In a bank reconciliation, outstanding checks would be added to the book balance.

A petty cash system is a system where the total of all receipts less the cash in the box equals the amount of the fund.

A cash budget is prepared by subtracting expected cash receipts and adding expected cash disbursements from ending cash on hand.

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Alpha Company is the:

All of the following are purposes of internal control EXCEPT:

Proper segregation of duties increases the chances for fraud and promotes the accuracy of accounting records.

Cash equivalents include accounts receivable expected to be collected within 90 days or less.

Which of the following is the first step in the ethical decision framework?

The beginning cash balance is $3,000, estimated cash receipts are $105,000, and estimated cash disbursements are $111,000. How much cash must be borrowed to have a desired ending balance of $5,000?

The journal entry for a note collected by the bank with interest requires a credit to Cash and a debit to both Notes Receivable and Interest Revenue.

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

At the time of payment, what journal entry is required to record a petty cash disbursement for postage?

A cash budget includes estimated cash:

Rotating employees through various jobs is a part of which characteristic of internal control?

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

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Exam 4: Internal Control and Cash

When opening incoming mail, the mailroom employee should compare the amount of the check received with the amount shown on the:

An EFT is an:

In a bank reconciliation, outstanding checks would be added to the book balance.

A petty cash system is a system where the total of all receipts less the cash in the box equals the amount of the fund.

A cash budget is prepared by subtracting expected cash receipts and adding expected cash disbursements from ending cash on hand.

Alpha Company has an account at First Bank. Alpha writes a check payable to Beta Company. In this transaction, Alpha Company is the:

All of the following are purposes of internal control EXCEPT:

Proper segregation of duties increases the chances for fraud and promotes the accuracy of accounting records.

Cash equivalents include accounts receivable expected to be collected within 90 days or less.

Which of the following is the first step in the ethical decision framework?

The beginning cash balance is $3,000, estimated cash receipts are $105,000, and estimated cash disbursements are $111,000. How much cash must be borrowed to have a desired ending balance of $5,000?

The journal entry for a note collected by the bank with interest requires a credit to Cash and a debit to both Notes Receivable and Interest Revenue.

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

At the time of payment, what journal entry is required to record a petty cash disbursement for postage?

A cash budget includes estimated cash:

Rotating employees through various jobs is a part of which characteristic of internal control?

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