Question 1

Internal control is enhanced by separating the control of a transaction from the record-keeping function.

Accepted Answer

A) True 
 B)False

Question 2

Assign the letter to indicate whether the following items would be added to or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.a.added to the company's books
b.subtracted from the company's books
c.added to the bank statement balance
d.subtracted from the bank statement balance
-charges for some other company's safe deposit box were posted to your account

Accepted Answer

The answer of Assign the letter to indicate whether the...

Question 3

Entries are made to the petty cash account when

Accepted Answer

A) making payments out of the fund 
B) recording shortages in the fund 
C) replenishing the petty cash fund 
D) establishing the fund 
A) making payments out of the fund 
B) recording shortages in the fund 
C) replenishing the petty cash fund 
D) establishing the fund

Question 4

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

Accepted Answer

A) True 
 B)False

Question 5

Match each item to a bank statement adjustment, a company books adjustment, or either.
-NSF check
A)bank statement adjustment
B)company books adjustment
C)either

Accepted Answer

The answer of Match each item to a bank statement...

Question 6

Assign the letter to indicate whether the following items would be added to or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.a.added to the company's books
b.subtracted from the company's books
c.added to the bank statement balance
d.subtracted from the bank statement balance
-outstanding checks

Accepted Answer

The answer of Assign the letter to indicate whether the...

Question 7

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

Accepted Answer

A) True 
 B)False

Question 8

Gamma Company and Delta Company have compiled the following data as of the end of the current fiscal year:   Depreciation (one of the operating expenses) for Gamma was $35,000, and for Delta was $65,000.​
(1) Calculate days' cash on hand for Gamma Company and for Delta Company. (Round your answer to one decimal place.)(2) Which company has the better liquidity position based on your calculation?

Accepted Answer

(1) Gamma Company's days' cash on hand:

Question 9

The debit recorded in the journal to reimburse the petty cash fund is to

Accepted Answer

A) Petty Cash 
B) Accounts Receivable 
C) Cash 
D) various accounts for which the petty cash was disbursed 
A) Petty Cash 
B) Accounts Receivable 
C) Cash 
D) various accounts for which the petty cash was disbursed

Question 10

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Error in recording a check
A)bank statement adjustment
B)company books adjustment
C)either

Accepted Answer

The answer of Match each item to a bank statement...

Question 11

Jackson Industries has collected the following information but needs assistance completing the table. The cash payments were 90% of collections.​   How much was the beginning balance of the cash account?

Accepted Answer

@#IMG-DLM& Calculations:
$511,770 × 90%

Question 12

After a bank reconciliation is completed, journal entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 13

An element of internal control is

Accepted Answer

A) risk assessment 
B) journals 
C) subsidiary ledgers 
D) controlling accounts 
A) risk assessment 
B) journals 
C) subsidiary ledgers 
D) controlling accounts

Question 14

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.​

Accepted Answer

A) $5,870 
B) $6,245 
C) $4,930 
D) $3,845 
A) $5,870 
B) $6,245 
C) $4,930 
D) $3,845

Question 15

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

Accepted Answer

A) deduction from the balance per company's records 
B) addition to the balance per bank statement 
C) deduction from the balance per bank statement 
D) addition to the balance per company's records 
A) deduction from the balance per company's records 
B) addition to the balance per bank statement 
C) deduction from the balance per bank statement 
D) addition to the balance per company's records

Question 16

For a strong internal control system over cash, it is important to have the duties related to cash receipts and cash payments divided among different employees.

Accepted Answer

A) True 
 B)False

Question 17

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Accepted Answer

A) True 
 B)False

Question 18

An accounting clerk prepared the following bank reconciliation for Inges Corp.   (a)Use the data in the bank reconciliation to prepare a new bank reconciliation for Inges Corp. that adjusts both the company's books and the bank statement balance in the traditional format.(b)If a balance sheet were prepared for Inges Corp. on August 31, what amounts should be reported for cash?

Accepted Answer

The answer of An accounting clerk prepared the following bank...

Question 19

A company's days' cash on hand is computed by dividing:

Accepted Answer

A) cash and short-term investments by daily cash operating expenses. 
B) cash by total cash operating expenses. 
C) cash, short-term investments, and accounts receivable by daily cash operating expenses. 
D) average cash over the period by daily cash operating expenses. 
A) cash and short-term investments by daily cash operating expenses. 
B) cash by total cash operating expenses. 
C) cash, short-term investments, and accounts receivable by daily cash operating expenses. 
D) average cash over the period by daily cash operating expenses.

Question 20

In the normal operation of business, you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is "NSF." The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will

Accepted Answer

A) subtract both values from balance according to bank 
B) add both values to balance according to books 
C) add both values to balance according to bank 
D) subtract both values from balance according to books 
A) subtract both values from balance according to bank 
B) add both values to balance according to books 
C) add both values to balance according to bank 
D) subtract both values from balance according to books

Exam 7: Internal Control and Cash

Internal control is enhanced by separating the control of a transaction from the record-keeping function.

Entries are made to the petty cash account when

If an adjustment for an NSF check is made in a company's bank reconciliation, then the company must have written a bad check during the month.

Match each item to a bank statement adjustment, a company books adjustment, or either. -NSF check A)bank statement adjustment B)company books adjustment C)either

The main reason that the bank statement cash balance and the company's cash balance do not initially balance is due to timing differences.

The debit recorded in the journal to reimburse the petty cash fund is to

Match each item to a bank statement adjustment, a company books adjustment, or either. -Error in recording a check A)bank statement adjustment B)company books adjustment C)either

Jackson Industries has collected the following information but needs assistance completing the table. The cash payments were 90% of collections.​ How much was the beginning balance of the cash account?

After a bank reconciliation is completed, journal entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

An element of internal control is

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.​

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

For a strong internal control system over cash, it is important to have the duties related to cash receipts and cash payments divided among different employees.

For efficiency of operations and better control over cash, a company should maintain only one bank account.

A company's days' cash on hand is computed by dividing:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters

Jackson Industries has collected the following information but needs assistance completing the table. The cash payments were 90% of collections. How much was the beginning balance of the cash account?

Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate the adjusted cash balance per books on May 31.