Question 1

Which of the following is not a basic principle of cash management?

Accepted Answer

A)  Increase collection of receivables. 
B)  Keep inventory levels low. 
C)  Pay all liabilities early. 
D)  Invest idle cash. 
A)  Increase collection of receivables. 
B)  Keep inventory levels low. 
C)  Pay all liabilities early. 
D)  Invest idle cash.

Question 2

Internal control measures

Accepted Answer

A)  only apply to publicly traded companies. 
B)  are in place to safeguard assets. 
C)  can eliminate all irregularities in the accounting process. 
D)  All of these answer choices are correct. 
A)  only apply to publicly traded companies. 
B)  are in place to safeguard assets. 
C)  can eliminate all irregularities in the accounting process. 
D)  All of these answer choices are correct.

Question 3

At April 30, Mendoza Company has the following bank information:   What is Mendoza's adjusted cash balance on April 30?

Accepted Answer

A)  $7,720. 
B)  $7,760. 
C)  $6,660. 
D)  $7,740. 
A)  $7,720. 
B)  $7,760. 
C)  $6,660. 
D)  $7,740.

Question 4

At Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts?

Accepted Answer

A)  Physical controls. 
B)  Documentation procedures. 
C)  Segregation of duties. 
D)  Mechanical controls. 
A)  Physical controls. 
B)  Documentation procedures. 
C)  Segregation of duties. 
D)  Mechanical controls.

Question 5

Deposits in transit

Accepted Answer

A)  have been recorded on the company's books but not yet by the bank. 
B)  have been recorded by the bank but not yet by the company. 
C)  have not been recorded by the bank or the company. 
D)  are customers' checks that have not yet been received by the company. 
A)  have been recorded on the company's books but not yet by the bank. 
B)  have been recorded by the bank but not yet by the company. 
C)  have not been recorded by the bank or the company. 
D)  are customers' checks that have not yet been received by the company.

Question 6

The entry to replenish a petty cash fund includes a credit to

Accepted Answer

A)  Petty Cash. 
B)  Cash. 
C)  Freight-In. 
D)  Postage Expense. 
A)  Petty Cash. 
B)  Cash. 
C)  Freight-In. 
D)  Postage Expense.

Question 7

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)  Wiring of funds to other locations. 
D)  Checks marked NSF. 
A)  Bank service charge. 
B)  Collection of a note receivable. 
C)  Wiring of funds to other locations. 
D)  Checks marked NSF.

Question 8

The following information was taken from Hurlbert Company cash budget for the month June   If the company has a policy of maintaining end of the month cash balance of $40,000, the amount the company would have to borrow is

Accepted Answer

A)  $24,000. 
B)  $10,000. 
C)  $16,000. 
D)  $0. 
A)  $24,000. 
B)  $10,000. 
C)  $16,000. 
D)  $0.

Question 9

If a check correctly written and paid by the bank for $491 is incorrectly recorded on the company's books for $419, the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A)  add $72 to the book's balance. 
B)  subtract $72 from the book's balance. 
C)  deduct $72 from the bank's balance. 
D)  deduct $491 from the book's balance. 
A)  add $72 to the book's balance. 
B)  subtract $72 from the book's balance. 
C)  deduct $72 from the bank's balance. 
D)  deduct $491 from the book's balance.

Question 10

If employees are bonded

Accepted Answer

A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company. 
A)  it means that they are not allowed to handle cash. 
B)  they have worked for the company for at least 10 years. 
C)  they have been insured against misappropriation of assets. 
D)  it is impossible for them to steal from the company.

Question 11

Foyle Company needs to make adjusting entries for each of the following reconciling items. Identify the account to be debited and the account to be credited in each case.
1. A check for $59 written to the company by J. Hammond was returned NSF.
2. The monthly service charge by the bank was $34.
3. The bank collected a $1,000 note plus interest of $60 on the company's
behalf. The company had not accrued the interest.

Accepted Answer

The answer of Foyle Company needs to make adjusting entries...

Question 12

Internal control is defined, in part, as a plan that safeguards

Accepted Answer

A)  all balance sheet accounts. 
B)  assets. 
C)  liabilities. 
D)  capital stock. 
A)  all balance sheet accounts. 
B)  assets. 
C)  liabilities. 
D)  capital stock.

Question 13

Blank checks

Accepted Answer

A)  should be safeguarded. 
B)  should be pre-signed. 
C)  do not need to be safeguarded since they must be signed to be valid. 
D)  should not be pre-numbered. 
A)  should be safeguarded. 
B)  should be pre-signed. 
C)  do not need to be safeguarded since they must be signed to be valid. 
D)  should not be pre-numbered.

Question 14

Russel Company assembled the following information in completing its March bank reconciliation:   As a result of this reconciliation, Russel will

Accepted Answer

A)  reduce its cash account by $1,425. 
B)  reduce its cash account by $75. 
C)  increase its cash account by $165. 
D)  reduce its cash account by $315. 
A)  reduce its cash account by $1,425. 
B)  reduce its cash account by $75. 
C)  increase its cash account by $165. 
D)  reduce its cash account by $315.

Question 15

Lackey Company wrote checks totaling $25,620 during October and $27,976 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $1,906. 
B)  $346. 
C)  $916. 
D)  $2,970. 
A)  $1,906. 
B)  $346. 
C)  $916. 
D)  $2,970.

Question 16

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Accepted Answer

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

Question 17

Adler Company developed the following reconciling information in preparing its December bank reconciliation:   Using the above information, determine the cash balance per books (before adjustments) for the Adler Company.

Accepted Answer

A)  $4,625. 
B)  $27,500. 
C)  $14,625. 
D)  $20,000. 
A)  $4,625. 
B)  $27,500. 
C)  $14,625. 
D)  $20,000.

Question 18

A check written by the company for $275 is incorrectly recorded by a company as $257. On the bank reconciliation, the $18 error should be

Accepted Answer

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

Question 19

The most important element of the fraud triangle is rationalization.

Accepted Answer

A) True 
 B)False

Question 20

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

Accepted Answer

A) True 
 B)False

Which of the following is not a basic principle of cash management?

Internal control measures

At April 30, Mendoza Company has the following bank information: What is Mendoza's adjusted cash balance on April 30?

At Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts?

Deposits in transit

The entry to replenish a petty cash fund includes a credit to

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

The following information was taken from Hurlbert Company cash budget for the month June If the company has a policy of maintaining end of the month cash balance of $40,000, the amount the company would have to borrow is

If a check correctly written and paid by the bank for $491 is incorrectly recorded on the company's books for $419, the appropriate treatment on the bank reconciliation would be to

If employees are bonded

Internal control is defined, in part, as a plan that safeguards

Blank checks

Russel Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Russel will

Lackey Company wrote checks totaling $25,620 during October and $27,976 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Adler Company developed the following reconciling information in preparing its December bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Adler Company.

A check written by the company for $275 is incorrectly recorded by a company as $257. On the bank reconciliation, the $18 error should be

The most important element of the fraud triangle is rationalization.

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

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

Filters

Exam 7: Fraud, Internal Control, and Cash

Which of the following is not a basic principle of cash management?

Internal control measures

At April 30, Mendoza Company has the following bank information: What is Mendoza's adjusted cash balance on April 30?

At Emerson Company, one bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts?

Deposits in transit

The entry to replenish a petty cash fund includes a credit to

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

The following information was taken from Hurlbert Company cash budget for the month June If the company has a policy of maintaining end of the month cash balance of $40,000, the amount the company would have to borrow is

If a check correctly written and paid by the bank for $491 is incorrectly recorded on the company's books for $419, the appropriate treatment on the bank reconciliation would be to

If employees are bonded

Internal control is defined, in part, as a plan that safeguards

Blank checks

Russel Company assembled the following information in completing its March bank reconciliation: As a result of this reconciliation, Russel will

Lackey Company wrote checks totaling $25,620 during October and $27,976 during November. $24,360 of these checks cleared the bank in October, and $27,330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Adler Company developed the following reconciling information in preparing its December bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for the Adler Company.

A check written by the company for $275 is incorrectly recorded by a company as $257. On the bank reconciliation, the $18 error should be

The most important element of the fraud triangle is rationalization.

A good system of internal control will safeguard its assets and enhance the accuracy and reliability of its accounting records.

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

Filters