Question 1

If the bank reconciliation includes a book error, no journal entries are required.

Accepted Answer

A) True 
 B)False

Question 2

In a voucher system, the vouchers are prepared by:

Accepted Answer

A) the outside supplier. 
B) the purchasing department. 
C) the accounting department. 
D) the sales department. 
A) the outside supplier. 
B) the purchasing department. 
C) the accounting department. 
D) the sales department.

Question 3

In a bank reconciliation, a dishonoured cheque will be shown on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 4

The following information is available for Andersen Company for the month ending 30 June 2014. • Balance per the bank statement is $10 241.43.
• Balance per books is $9 745.06.
• cheque #506 for $1 948.52 and cheque #510 for $1 800.25 were not shown on the 30 June bank statement.
• A deposit in transit of $5 113.40 had not been received by the bank when the bank statement was generated.
• A bank debit memo indicated a dishonoured cheque in the amount of $79 written by Bruce Garrett to Andersen Company on 13 June.
• A bank credit memo indicated a bill collected by the bank of $1 900 and interest revenue of $75 on 20 June.
• The bank statement indicated service charges of $35.
What is the adjusted bank balance?

Accepted Answer

A) $11 606.06 
B) $8 152.43 
C) $19 103.60 
D) $8 876.80 
A) $11 606.06 
B) $8 152.43 
C) $19 103.60 
D) $8 876.80

Question 5

If the bank reconciliation includes a bank service charge, a journal entry is required which debits Cash and credits Miscellaneous expense.

Accepted Answer

A) True 
 B)False

Question 6

In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the junior accountant collects cheques and cash from customers and records the transactions into the Journal. The controller approves the journal entries and bank reconciliations. The treasurer signs cheques and approves contracts.

Accepted Answer

A) Assignment of responsibilities 
B) Separation of duties 
C) Documents and records 
D) Competent, reliable, and ethical personnel 
A) Assignment of responsibilities 
B) Separation of duties 
C) Documents and records 
D) Competent, reliable, and ethical personnel

Question 7

A company received a bank statement showing a balance of $62 300. Reconciling items were outstanding cheques of $1 450 and a deposit in transit of $8 500. What is the company's adjusted bank balance?

Accepted Answer

A) $60 850 
B) $69 350 
C) $72 250 
D) $70 850 
A) $60 850 
B) $69 350 
C) $72 250 
D) $70 850

Question 8

A pharmaceutical company testing drugs to determine possible side effects is a part of:

Accepted Answer

A) risk assessment. 
B) monitoring controls. 
C) control procedures. 
D) information systems. 
A) risk assessment. 
B) monitoring controls. 
C) control procedures. 
D) information systems.

Question 9

If the bank reconciliation includes outstanding cheques, no journal entries are required.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Accepted Answer

A) Canceled cheques 
B) Dishonoured cheques 
C) Deposits in transit 
D) Outstanding cheques 
A) Canceled cheques 
B) Dishonoured cheques 
C) Deposits in transit 
D) Outstanding cheques

Question 11

Which of the following describes collusion?

Accepted Answer

A) When bogus websites acquire passwords and account numbers fraudulently 
B) When one employee steals from a company 
C) When a company defrauds its suppliers by making false claims 
D) When two or more people cooperate together to defraud a company 
A) When bogus websites acquire passwords and account numbers fraudulently 
B) When one employee steals from a company 
C) When a company defrauds its suppliers by making false claims 
D) When two or more people cooperate together to defraud a company

Question 12

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following items are both reconciling items on the bank side of the reconciliation?

Accepted Answer

A) Deposit in transit and outstanding cheques 
B) Outstanding cheques and correction of book error 
C) Deposit in transit and dishonoured cheque 
D) Bank service charge and correction of book error 
A) Deposit in transit and outstanding cheques 
B) Outstanding cheques and correction of book error 
C) Deposit in transit and dishonoured cheque 
D) Bank service charge and correction of book error

Question 14

Which of the following is a benefit of internet banking?

Accepted Answer

A) The business can reduce their internal controls over cash receipts. 
B) The business can reconcile to the bank's balance at any time. 
C) The bank reconciliation is not necessary. 
D) A company's book balance will always equal the bank's balance. 
A) The business can reduce their internal controls over cash receipts. 
B) The business can reconcile to the bank's balance at any time. 
C) The bank reconciliation is not necessary. 
D) A company's book balance will always equal the bank's balance.

Question 15

Which of the following statements describes a receiving report?

Accepted Answer

A) It is a statement from the supplier showing the goods purchased and the amount due. 
B) It is an order to purchase goods from a supplier. 
C) It is a report showing that the goods have been received in good condition, as ordered. 
D) It is a document authorising a payment to a supplier. 
A) It is a statement from the supplier showing the goods purchased and the amount due. 
B) It is an order to purchase goods from a supplier. 
C) It is a report showing that the goods have been received in good condition, as ordered. 
D) It is a document authorising a payment to a supplier.

Question 16

The following information is needed to reconcile the cash balance for Woods Paper Products. • A deposit of $5 794.62 is in transit.
• Outstanding cheques total $1 533.25.
• The book balance is $5 695.62.
• The bookkeeper recorded a $1 524.00 cheque as $15 240 in payment of the current month's rent.
• The bank balance at 28 February 2014 was $16 500.25.
• A deposit of $300 was credited by the bank for $3 000.
• A customer's cheque for $1 280 was returned for nonsufficient funds.
• The bank service charge is $70.
Which of the following journal entries is needed to adjust for the dishonoured cheque?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 17

Please refer to the following bank reconciliation:   Journal entries are required for the reconciling items on the book side because:

Accepted Answer

A) those transactions have already occurred, but have not been recorded yet on the company books. 
B) the amounts are immaterial. 
C) those transactions have not yet been recorded by the bank. 
D) the adjusted balances on both sides are the same amounts. 
A) those transactions have already occurred, but have not been recorded yet on the company books. 
B) the amounts are immaterial. 
C) those transactions have not yet been recorded by the bank. 
D) the adjusted balances on both sides are the same amounts.

Question 18

A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash slips as below.   The journal entry to replenish the account would be which of the following?

Accepted Answer

A) Debit Cash $10, credit various expenses $10 
B) Debit various expenses $390, credit Petty cash fund $390 
C) Credit Petty cash fund $390, debit Cash $390 
D) Debit various expenses $390, credit Cash $390 
A) Debit Cash $10, credit various expenses $10 
B) Debit various expenses $390, credit Petty cash fund $390 
C) Credit Petty cash fund $390, debit Cash $390 
D) Debit various expenses $390, credit Cash $390

Question 19

In the following situation, which internal control procedure needs strengthening? The controller's duties include approving bank reconciliations, approving general journal entries, hiring administrative staff, and approving various types of administrative expenses. She needs new computer equipment for the accounting office, but there are no guidelines specifying whether she can approve purchases of office equipment.

Accepted Answer

A) Separation of duties 
B) Assignment of responsibilities 
C) Competent, reliable, and ethical personnel 
D) Documents and records 
A) Separation of duties 
B) Assignment of responsibilities 
C) Competent, reliable, and ethical personnel 
D) Documents and records

Question 20

Petty cash is a fund containing a small amount of cash that is used to pay for minor expenditures.

Accepted Answer

A) True 
 B)False

If the bank reconciliation includes a book error, no journal entries are required.

In a voucher system, the vouchers are prepared by:

In a bank reconciliation, a dishonoured cheque will be shown on the bank side of the reconciliation.

If the bank reconciliation includes a bank service charge, a journal entry is required which debits Cash and credits Miscellaneous expense.

A company received a bank statement showing a balance of $62 300. Reconciling items were outstanding cheques of $1 450 and a deposit in transit of $8 500. What is the company's adjusted bank balance?

A pharmaceutical company testing drugs to determine possible side effects is a part of:

If the bank reconciliation includes outstanding cheques, no journal entries are required.

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Which of the following describes collusion?

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Which of the following items are both reconciling items on the bank side of the reconciliation?

Which of the following is a benefit of internet banking?

Which of the following statements describes a receiving report?

Please refer to the following bank reconciliation: Journal entries are required for the reconciling items on the book side because:

A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash slips as below. The journal entry to replenish the account would be which of the following?

Petty cash is a fund containing a small amount of cash that is used to pay for minor expenditures.

The Role of Accounting in Business

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Share Capital and the Balance Sheet

Companies: Effects on Retained Earnings, Share Splits and Buy-Backs, and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Appendix

Filters

Exam 8: Internal Control and Cash

If the bank reconciliation includes a book error, no journal entries are required.

In a voucher system, the vouchers are prepared by:

In a bank reconciliation, a dishonoured cheque will be shown on the bank side of the reconciliation.

If the bank reconciliation includes a bank service charge, a journal entry is required which debits Cash and credits Miscellaneous expense.

A company received a bank statement showing a balance of $62 300. Reconciling items were outstanding cheques of $1 450 and a deposit in transit of $8 500. What is the company's adjusted bank balance?

A pharmaceutical company testing drugs to determine possible side effects is a part of:

If the bank reconciliation includes outstanding cheques, no journal entries are required.

Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation?

Which of the following describes collusion?

A basic principle of internal control over cash receipts is that the deposit of the cash and the recording of the receipts into the ledger should be separated.

Which of the following items are both reconciling items on the bank side of the reconciliation?

Which of the following is a benefit of internet banking?

Which of the following statements describes a receiving report?

Please refer to the following bank reconciliation: Journal entries are required for the reconciling items on the book side because:

A petty cash fund was established with a $400 balance. It currently has cash of $10 and petty cash slips as below. The journal entry to replenish the account would be which of the following?

Petty cash is a fund containing a small amount of cash that is used to pay for minor expenditures.

The Role of Accounting in Business

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Share Capital and the Balance Sheet

Companies: Effects on Retained Earnings, Share Splits and Buy-Backs, and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Appendix

Filters