Question 1

Gabana Inc.'s $€ 100$ petty cash fund has cash of $€ 4$ and receipts of $€ 91$. The journal entry to replenish the account would include

Accepted Answer

A)  credit to Cash Over and Short for $€ 5$. 
B)  credit to petty Cash for $€ 85$. 
C)  debit to Cash for $€91$. 
D)  debit to Cash for $€ 96$. 
A)  credit to Cash Over and Short for $€ 5$. 
B)  credit to petty Cash for $€ 85$. 
C)  debit to Cash for $€91$. 
D)  debit to Cash for $€ 96$.

Question 2

The cash account shows a balance of $45,000 before reconciliation.The bank statement does not include a deposit of $2,300 made on the last day of the month.The bank statement shows a collection by the bank of $940 and a customer's check for $320 was returned because it was NSF.A customer's check for $450 was recorded on the books as $540, and a check written for $79 was recorded as $97.The correct balance in the cash account was

Accepted Answer

A) $45,512. 
B) $45,548. 
C) $45,728. 
D) $45,848. 
A) $45,512. 
B) $45,548. 
C) $45,728. 
D) $45,848.

Question 3

The custodian of a company asset should

Accepted Answer

A) have access to the accounting records for that asset. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant. 
A) have access to the accounting records for that asset. 
B) be someone outside the company. 
C) not have access to the accounting records for that asset. 
D) be an accountant.

Question 4

Because cash is the least liquid current asset it is listed last in the current assets section of the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 5

Cast equivalents, such as highly liquid investments that can be converted into a specific amount of cash, are currently reported with cash on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 6

Related buying activities include

Accepted Answer

A) ordering, receiving, paying. 
B) ordering, selling, paying. 
C) ordering, shipping, billing. 
D) selling, shipping, paying. 
A) ordering, receiving, paying. 
B) ordering, selling, paying. 
C) ordering, shipping, billing. 
D) selling, shipping, paying.

Question 7

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 8

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Accepted Answer

A) True 
 B)False

Question 9

Under a voucher system, a prenumbered voucher is prepared for every

Accepted Answer

A) cash receipt, regardless of source. 
B) transaction entered into by the business. 
C) expenditure except those made from petty cash. 
D) journal entry. 
A) cash receipt, regardless of source. 
B) transaction entered into by the business. 
C) expenditure except those made from petty cash. 
D) journal entry.

Question 10

Cash equivalents are currently reported as short-term investments on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 11

A $€ 200$ petty cash fund has cash of $€ 30$ and receipts of $€ 160$. The journal entry to replenish the account would include a credit to

Accepted Answer

A)  Cash for $€ 170$. 
B)  Petty Cash for $€ 170$. 
C)  Cash Over and Short for $€ 10$. 
D)  Cash for $€ 160$. 
A)  Cash for $€ 170$. 
B)  Petty Cash for $€ 170$. 
C)  Cash Over and Short for $€ 10$. 
D)  Cash for $€ 160$.

Question 12

Internal control is most effective when several people are responsible for a given task.

Accepted Answer

A) True 
 B)False

Question 13

A debit balance in Cash Over and Short is reported as a

Accepted Answer

A) contra asset. 
B) miscellaneous asset. 
C) miscellaneous expense. 
D) miscellaneous revenue. 
A) contra asset. 
B) miscellaneous asset. 
C) miscellaneous expense. 
D) miscellaneous revenue.

Question 14

The cash account shows a balance of $90,000 before reconciliation.The bank statement does not include a deposit of $4,600 made on the last day of the month.The bank statement shows a collection by the bank of $1,880 and a customer's check for $640 was returned because it was NSF.A customer's check for $790 was recorded on the books as $970, and a check written for $159 was recorded as $195.The correct balance in the cash account was

Accepted Answer

A) $91,024. 
B) $91,096. 
C) $91,456. 
D) $95,696. 
A) $91,024. 
B) $91,096. 
C) $91,456. 
D) $95,696.

Question 15

The principle of establishing responsibility does not include

Accepted Answer

A) one person being responsible for one task. 
B) authorization of transactions. 
C) independent internal verification. 
D) approval of transactions. 
A) one person being responsible for one task. 
B) authorization of transactions. 
C) independent internal verification. 
D) approval of transactions.

Question 16

Which of the following is not one of the main factors that contribute to fraudulent activity?

Accepted Answer

A) Opportunity 
B) Incompatible duties 
C) Financial pressure 
D) Rationalization 
A) Opportunity 
B) Incompatible duties 
C) Financial pressure 
D) Rationalization

Question 17

A bank statement

Accepted Answer

A) lets a depositor know the financial position of the bank as of a certain date. 
B) is a credit reference letter written by the depositor's bank. 
C) is a bill from the bank for services rendered. 
D) shows the activity which increased or decreased the depositor's account balance. 
A) lets a depositor know the financial position of the bank as of a certain date. 
B) is a credit reference letter written by the depositor's bank. 
C) is a bill from the bank for services rendered. 
D) shows the activity which increased or decreased the depositor's account balance.

Question 18

Proper control for over-the-counter cash receipts includes

Accepted Answer

A) a cash register with totals visible to the customer. 
B) using electronic cash registers with no tapes. 
C) cash count sheets requiring only the supervisor's signature. 
D) cash count sheets requiring only the cashier's signature. 
A) a cash register with totals visible to the customer. 
B) using electronic cash registers with no tapes. 
C) cash count sheets requiring only the supervisor's signature. 
D) cash count sheets requiring only the cashier's signature.

Question 19

Use the following information to answer questions 
The petty cash fund of CHF250 for the Hansen Company appeared as follows on July 31, 2011: 
$\begin{array}{lr}\text { Cash }&\text { CHF } 7.50\
\text { Petty cash vouchers }\
\text { Freight-in } & \text { CHF88.50 } \
\text { Postage } & 45.00 \
\text { Balloons for a special occasion } & 27.00 \
\text { Client entertainment } & 65.00
\end{array}$

On July 31, the office manager gives instruction to increase the petty cash fund to CHF300.
-The journal entry to increase the petty cash fund would include

Accepted Answer

A)  credit to Cash for CHF292.50. 
B)  Credit to Petty Cash for CHF242.50. 
C)  debit to Cash for CHFg2.50. 
D)  debit to Petty Cash for CHF50. 
A)  credit to Cash for CHF292.50. 
B)  Credit to Petty Cash for CHF242.50. 
C)  debit to Cash for CHFg2.50. 
D)  debit to Petty Cash for CHF50.

Question 20

A voucher system is used by many large companies as a means of controlling cash receipts.

Accepted Answer

A) True 
 B)False

Gabana Inc.'s $€ 100$ petty cash fund has cash of $€ 4$ and receipts of $€ 91$ . The journal entry to replenish the account would include

The custodian of a company asset should

Because cash is the least liquid current asset it is listed last in the current assets section of the statement of financial position.

Cast equivalents, such as highly liquid investments that can be converted into a specific amount of cash, are currently reported with cash on the statement of financial position.

Related buying activities include

If employees are bonded

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Under a voucher system, a prenumbered voucher is prepared for every

Cash equivalents are currently reported as short-term investments on the statement of financial position.

A $€ 200$ petty cash fund has cash of $€ 30$ and receipts of $€ 160$ . The journal entry to replenish the account would include a credit to

Internal control is most effective when several people are responsible for a given task.

A debit balance in Cash Over and Short is reported as a

The principle of establishing responsibility does not include

Which of the following is not one of the main factors that contribute to fraudulent activity?

A bank statement

Proper control for over-the-counter cash receipts includes

A voucher system is used by many large companies as a means of controlling cash receipts.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 7: Fraud, Internal Control, and Cash

Gabana Inc.'s €100€ 100€100 petty cash fund has cash of €4€ 4€4 and receipts of €91€ 91€91 . The journal entry to replenish the account would include

The custodian of a company asset should

Because cash is the least liquid current asset it is listed last in the current assets section of the statement of financial position.

Cast equivalents, such as highly liquid investments that can be converted into a specific amount of cash, are currently reported with cash on the statement of financial position.

Related buying activities include

If employees are bonded

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Under a voucher system, a prenumbered voucher is prepared for every

Cash equivalents are currently reported as short-term investments on the statement of financial position.

A €200€ 200€200 petty cash fund has cash of €30€ 30€30 and receipts of €160€ 160€160 . The journal entry to replenish the account would include a credit to

Internal control is most effective when several people are responsible for a given task.

A debit balance in Cash Over and Short is reported as a

The principle of establishing responsibility does not include

Which of the following is not one of the main factors that contribute to fraudulent activity?

A bank statement

Proper control for over-the-counter cash receipts includes

A voucher system is used by many large companies as a means of controlling cash receipts.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters

Gabana Inc.'s $€ 100$ petty cash fund has cash of $€ 4$ and receipts of $€ 91$ . The journal entry to replenish the account would include

A $€ 200$ petty cash fund has cash of $€ 30$ and receipts of $€ 160$ . The journal entry to replenish the account would include a credit to