Question 1

A NSF check should appear in which section of the bank reconciliation?

Accepted Answer

A)  Addition to the balance per books. 
B)  Deduction from the balance per bank. 
C)  Addition to the balance per bank. 
D)  Deduction from the balance per books. 
A)  Addition to the balance per books. 
B)  Deduction from the balance per bank. 
C)  Addition to the balance per bank. 
D)  Deduction from the balance per books. D

Question 2

Explain the control principle of independent internal verification?
(b) What practices are important in applying this principle?

Accepted Answer

(a) Independent internal verification involves the review, comparison, and reconciliation of data prepared by employees.
(b) Maximum benefit is obtained from independent internal verification when:
(1) The verification is made periodically or on a surprise basis.
(2) The verification is done by an employee who is independent of the personnel
responsible for the information.
(3) Discrepancies and exceptions are reported to a management level that can take appropriate corrective action.

Question 3

IFRS, compared to GAAP, tends to be more

Accepted Answer

A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements. 
A)  detailed. 
B)  rules-based. 
C)  principles-based. 
D)  full of disclosures requirements. C

Question 4

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

Accepted Answer

A) True 
 B)False

Question 5

Cash equivalents are defined by IFRS as

Accepted Answer

A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  short-term, highly liquid investments that are readily convertible into known amounts of cash. 
A)  cash on hand. 
B)  demand deposits. 
C)  cash on hand and demand deposits. 
D)  short-term, highly liquid investments that are readily convertible into known amounts of cash.

Question 6

Internal controls are not designed to safeguard assets from

Accepted Answer

A)  natural disasters. 
B)  employee theft. 
C)  robbery. 
D)  unauthorized use. 
A)  natural disasters. 
B)  employee theft. 
C)  robbery. 
D)  unauthorized use.

Question 7

The following information was taken from Niland Company cash budget for the month of April   If the company has a policy of maintaining end of the month cash balance of $75,000, the amount the company would have to borrow is

Accepted Answer

A)  $87,000. 
B)  $21,000. 
C)  $6,000. 
D)  $0. 
A)  $87,000. 
B)  $21,000. 
C)  $6,000. 
D)  $0.

Question 8

A petty cash fund is used to pay relatively large amounts.

Accepted Answer

A) True 
 B)False

Question 9

The bank statement for Cates Company indicates a balance of $1,730 on June 30. The cash balance per books had a balance of $799 on this date. The following information pertains to the bank transactions for the company.
1. Deposit of $760, representing cash receipts of June 30, did not appear on the bank statement.
2. Outstanding checks totaled $340.
3. Bank service charges for June amounted to $25
4. The bank collected a note receivable for the company for $1,400 plus $56 interest revenue.
5. An NSF check for $80 from a customer was returned with the statement.
Instructions
a. Prepare a bank reconciliation for June 30.
b. Prepare any adjusting entries necessary as a result of the bank reconciliation.

Accepted Answer

@#IMG-DLM& 
Ex. 219
The bank statement for Adcock

Question 10

A traditional definition of internal control specifically includes all of the following features except

Accepted Answer

A)  adherence to prescribed managerial policies. 
B)  promotion of operational efficiency. 
C)  reliability of accounting data. 
D)  insistence that employees not take earned vacations. 
A)  adherence to prescribed managerial policies. 
B)  promotion of operational efficiency. 
C)  reliability of accounting data. 
D)  insistence that employees not take earned vacations.

Question 11

Expected direct materials purchases in Rees Company are $140,000 in the first quarter and $180,000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:

Accepted Answer

A)  $192,000. 
B)  $180,000. 
C)  $156,000. 
D)  $144,000. 
A)  $192,000. 
B)  $180,000. 
C)  $156,000. 
D)  $144,000.

Question 12

GAAP, compared to IFRS, tends to be more

Accepted Answer

A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements. 
A)  simple in accounting requirements. 
B)  rules-based. 
C)  principles-based. 
D)  simple in disclosures requirements.

Question 13

Segregation of duties among employees eliminates the possibility of collusion.

Accepted Answer

A) True 
 B)False

Question 14

Management of cash is the responsibility of the company

Accepted Answer

A)  accountant. 
B)  president. 
C)  treasurer. 
D)  vice-president. 
A)  accountant. 
B)  president. 
C)  treasurer. 
D)  vice-president.

Question 15

The following information was taken from Hobson Company cash budget for the month of June   If the company has a policy of maintaining end-of-the-month cash balance of $125,000, the amount the company would have to borrow is

Accepted Answer

A)  $50,000. 
B)  $25,000. 
C)  $0 
D)  $75,000. 
A)  $50,000. 
B)  $25,000. 
C)  $0 
D)  $75,000.

Question 16

Physical controls to safeguard assets do not include

Accepted Answer

A)  cashier department supervisors. 
B)  vaults. 
C)  safety deposit boxes. 
D)  locked warehouses. 
A)  cashier department supervisors. 
B)  vaults. 
C)  safety deposit boxes. 
D)  locked warehouses.

Question 17

The following information was taken from Molina Company cash budget for the month of November:   If the company has a policy of maintaining an end-of-the-month cash balance of $80,000, the amount the company would have to borrow is

Accepted Answer

A)  $44,000. 
B)  $0. 
C)  $28,000. 
D)  $80,000. 
A)  $44,000. 
B)  $0. 
C)  $28,000. 
D)  $80,000.

Question 18

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Accepted Answer

A) True 
 B)False

Question 19

Indicate whether each of the business practices listed below strengthens (S) or weakens (W) a company's system of internal control.

Accepted Answer

The answer of Indicate whether each of the business practices...

Question 20

In a small business, the lack of certain separations of duties can best be overcome by

Accepted Answer

A)  bonding the employees. 
B)  getting the owner actively involved. 
C)  hiring only honest employees. 
D)  holding one person responsible for a given set of transactions. 
A)  bonding the employees. 
B)  getting the owner actively involved. 
C)  hiring only honest employees. 
D)  holding one person responsible for a given set of transactions.

A NSF check should appear in which section of the bank reconciliation?

Explain the control principle of independent internal verification? (b) What practices are important in applying this principle?

IFRS, compared to GAAP, tends to be more

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

Cash equivalents are defined by IFRS as

Internal controls are not designed to safeguard assets from

The following information was taken from Niland Company cash budget for the month of April If the company has a policy of maintaining end of the month cash balance of $75,000, the amount the company would have to borrow is

A petty cash fund is used to pay relatively large amounts.

A traditional definition of internal control specifically includes all of the following features except

Expected direct materials purchases in Rees Company are $140,000 in the first quarter and $180,000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:

GAAP, compared to IFRS, tends to be more

Segregation of duties among employees eliminates the possibility of collusion.

Management of cash is the responsibility of the company

The following information was taken from Hobson Company cash budget for the month of June If the company has a policy of maintaining end-of-the-month cash balance of $125,000, the amount the company would have to borrow is

Physical controls to safeguard assets do not include

The following information was taken from Molina Company cash budget for the month of November: If the company has a policy of maintaining an end-of-the-month cash balance of $80,000, the amount the company would have to borrow is

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Indicate whether each of the business practices listed below strengthens (S) or weakens (W) a company's system of internal control.

In a small business, the lack of certain separations of duties can best be overcome by

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

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Exam 7: Fraud, Internal Control, and Cash

A NSF check should appear in which section of the bank reconciliation?

Explain the control principle of independent internal verification? (b) What practices are important in applying this principle?

IFRS, compared to GAAP, tends to be more

Employees sometimes commit fraud because of personal financial problems caused by too much debt.

Cash equivalents are defined by IFRS as

Internal controls are not designed to safeguard assets from

The following information was taken from Niland Company cash budget for the month of April If the company has a policy of maintaining end of the month cash balance of $75,000, the amount the company would have to borrow is

A petty cash fund is used to pay relatively large amounts.

A traditional definition of internal control specifically includes all of the following features except

GAAP, compared to IFRS, tends to be more

Segregation of duties among employees eliminates the possibility of collusion.

Management of cash is the responsibility of the company

The following information was taken from Hobson Company cash budget for the month of June If the company has a policy of maintaining end-of-the-month cash balance of $125,000, the amount the company would have to borrow is

Physical controls to safeguard assets do not include

The following information was taken from Molina Company cash budget for the month of November: If the company has a policy of maintaining an end-of-the-month cash balance of $80,000, the amount the company would have to borrow is

If a monthly cash budget is prepared properly, there will never be a cash deficiency at the end of any month.

Indicate whether each of the business practices listed below strengthens (S) or weakens (W) a company's system of internal control.

In a small business, the lack of certain separations of duties can best be overcome by

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

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