Question 1

On a bank reconciliation, which of the following would be added to 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 2

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

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 3

On a bank reconciliation, which of the following would be added to the balance per books?

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 4

If a cheque correctly written and paid by the bank for $483 is incorrectly recorded on the company's books for $384, the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A)  add $99 to the balance per bank. 
B)  add $99 to the balance per books. 
C)  deduct $99 from the balance per books. 
D)  deduct $99 from the balance per bank. 
A)  add $99 to the balance per bank. 
B)  add $99 to the balance per books. 
C)  deduct $99 from the balance per books. 
D)  deduct $99 from the balance per bank.

Question 5

A system of internal control can only provide reasonable assurance, which is based on the belief that

Accepted Answer

A)  the system is infallible. 
B)  the system can always detect errors and irregularities. 
C)  the costs of establishing control activities should not be greater than their expected benefit. 
D)  the human element is not important. 
A)  the system is infallible. 
B)  the system can always detect errors and irregularities. 
C)  the costs of establishing control activities should not be greater than their expected benefit. 
D)  the human element is not important.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

You have recently started a part time job in the accounting department of Home Energy Limited. The accountant, Joe Kool, had prepared the company's bank reconciliation for June 2018. After completing the reconciliation he made the following journal entry:   Joe was reviewing the bank reconciliation with you when unfortunately you spilled your coffee on it. He asks you to rewrite the reconciliation, in good form. He remembers that the only outstanding deposit was the last deposit for the month. You check the general ledger and the bank balance at June 30 was $24,527 (credit). You also check the bank statement and the balance was $22,314 (debit on the bank statement, that is, overdrawn). You look up the last deposit for the month-it was for $21,789.InstructionsUsing the above information prepare, in good form, the bank reconciliation for Home Energy Limited for June.

Accepted Answer

@#IMG-DLM& Note: To solve, you complete the bank r

Question 8

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

Question 9

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 10

Restricted cash is

Accepted Answer

A)  only available for general use. 
B)  only for overdraft purposes. 
C)  not available for general use. 
D)  included with cash and cash equivalents. 
A)  only available for general use. 
B)  only for overdraft purposes. 
C)  not available for general use. 
D)  included with cash and cash equivalents.

Question 11

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

Accepted Answer

A)  cost of establishing control procedures 
B)  the human element 
C)  use of a bank account 
D)  the size of the company 
A)  cost of establishing control procedures 
B)  the human element 
C)  use of a bank account 
D)  the size of the company

Question 12

An accounts payable clerk also has cheque signing authority. Which control procedure is violated?

Accepted Answer

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

Question 13

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Accepted Answer

A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of a control activity. 
D)  reduces cost and maximizes benefit. 
A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of a control activity. 
D)  reduces cost and maximizes benefit.

Question 14

Which of the following statements is true?

Accepted Answer

A)  A good system of internal control does not require monitoring. 
B)  Risk assessment is one component of a good system of internal control. 
C)  When one individual is responsible for all related activities, the potential for errors and irregularities is decreased. 
D)  Control activities are most effective when several people are responsible for a given task. 
A)  A good system of internal control does not require monitoring. 
B)  Risk assessment is one component of a good system of internal control. 
C)  When one individual is responsible for all related activities, the potential for errors and irregularities is decreased. 
D)  Control activities are most effective when several people are responsible for a given task.

Question 15

All of the following are examples of a control activity except

Accepted Answer

A)  an extensive marketing plan. 
B)  assignment of responsibility. 
C)  segregation of duties. 
D)  insurance on assets. 
A)  an extensive marketing plan. 
B)  assignment of responsibility. 
C)  segregation of duties. 
D)  insurance on assets.

Question 16

Which of the following is not a good control activity over cash?

Accepted Answer

A)  Payments to creditors should be made in cash. 
B)  There should be limited access to cash. 
C)  The amount of cash on hand should be kept at a minimum. 
D)  Cash should be deposited daily. 
A)  Payments to creditors should be made in cash. 
B)  There should be limited access to cash. 
C)  The amount of cash on hand should be kept at a minimum. 
D)  Cash should be deposited daily.

Question 17

Sunny Sky Corporation gathered the following reconciling information in preparing its August bank reconciliation:   The reconciled cash balance per bank at August 31 is

Accepted Answer

A)  $ 17,785. 
B)  $ 14,075. 
C)  $ 9,575. 
D)  $18,575. 
A)  $ 17,785. 
B)  $ 14,075. 
C)  $ 9,575. 
D)  $18,575.

Question 18

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following would not cause a bank to debit a depositor's account?

Accepted Answer

A)  bank service charge 
B)  collection of a note receivable 
C)  payment of a note payable 
D)  cheques marked NSF 
A)  bank service charge 
B)  collection of a note receivable 
C)  payment of a note payable 
D)  cheques marked NSF

Question 20

Cash equivalents

Accepted Answer

A)  include all investments in shares. 
B)  include short-term, highly liquid trading investments plus accounts receivable less any bank overdrafts. 
C)  include short-term, highly liquid trading investments less any bank overdrafts. 
D)  are reported as non-current assets. 
A)  include all investments in shares. 
B)  include short-term, highly liquid trading investments plus accounts receivable less any bank overdrafts. 
C)  include short-term, highly liquid trading investments less any bank overdrafts. 
D)  are reported as non-current assets.

On a bank reconciliation, which of the following would be added to the balance per bank?

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

On a bank reconciliation, which of the following would be added to the balance per books?

If a cheque correctly written and paid by the bank for $483 is incorrectly recorded on the company's books for $384, the appropriate treatment on the bank reconciliation would be to

A system of internal control can only provide reasonable assurance, which is based on the belief that

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

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?

Restricted cash is

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

An accounts payable clerk also has cheque signing authority. Which control procedure is violated?

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Which of the following statements is true?

All of the following are examples of a control activity except

Which of the following is not a good control activity over cash?

Sunny Sky Corporation gathered the following reconciling information in preparing its August bank reconciliation: The reconciled cash balance per bank at August 31 is

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

Which one of the following would not cause a bank to debit a depositor's account?

Cash equivalents

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

On a bank reconciliation, which of the following would be added to the balance per bank?

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

On a bank reconciliation, which of the following would be added to the balance per books?

If a cheque correctly written and paid by the bank for $483 is incorrectly recorded on the company's books for $384, the appropriate treatment on the bank reconciliation would be to

A system of internal control can only provide reasonable assurance, which is based on the belief that

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

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?

Restricted cash is

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

An accounts payable clerk also has cheque signing authority. Which control procedure is violated?

Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them

Which of the following statements is true?

All of the following are examples of a control activity except

Which of the following is not a good control activity over cash?

Sunny Sky Corporation gathered the following reconciling information in preparing its August bank reconciliation: The reconciled cash balance per bank at August 31 is

External auditors report on whether or not the company's financial statements fairly present its financial position and results of operations.

Which one of the following would not cause a bank to debit a depositor's account?

Cash equivalents

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