Question 1

Maximum benefit from independent internal verification is obtained when

Accepted Answer

A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the audit. 
A) it is made on a pre-announced basis. 
B) it is done by the employee possessing custody of the asset. 
C) discrepancies are reported to management. 
D) it is done at the time of the audit.

Question 2

A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93.The entry to replenish the fund would

Accepted Answer

A) credit Cash Over and Short for $4. 
B) credit Miscellaneous Revenue for $4. 
C) debit Cash Over and Short for $4. 
D) debit Miscellaneous Expense for $4. 
A) credit Cash Over and Short for $4. 
B) credit Miscellaneous Revenue for $4. 
C) debit Cash Over and Short for $4. 
D) debit Miscellaneous Expense for $4.

Question 3

Wynn Company developed the following reconciling information in preparing its September bank reconciliation: $\begin{array}{lr}
\text { Cash balance per bank, } 9 / 30 & \$ 20,000 \
\text { Note receivable collected by bank } & 8,000 \
\text { Outstanding checks } & 12,000 \
\text { Deposits in transit } & 6,000 \
\text { Bank service charge } & 100 \
\text { NSF check } & 1,600
\end{array}$
 Determine the cash balance per books (before adjustments) for Wynn Company.

Accepted Answer

A) $15,700. 
B) $26,000. 
C) $7,700. 
D) $20,000. 
A) $15,700. 
B) $26,000. 
C) $7,700. 
D) $20,000.

Question 4

Tayler Company wrote checks totaling $25,620 during October and $27,975 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) $1,905 
B) $345 
C) $915 
D) $2,970 
A) $1,905 
B) $345 
C) $915 
D) $2,970

Question 5

Rainey Company wrote checks totaling $8,540 during October and $9,325 during November.$8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November.What was the amount of outstanding checks on November 30?

Accepted Answer

A) $635 
B) $115 
C) $305 
D) $990 
A) $635 
B) $115 
C) $305 
D) $990

Question 6

At June 30, Mareska Company has the following bank information: cash balance per bank $€ 7,200$; outstanding checks $€ 560$; deposits in transit $€ 1,100$; credit memo for interest $€ 20$; bank service charge $€ 40$. What is Mareska's adjusted cash balance on June $30 ?$

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 7

Two individuals at a retail store work the same cash register.You evaluate this situation as

Accepted Answer

A) a violation of establishment of responsibility. 
B) a violation of segregation of duties. 
C) supporting the establishment of responsibility. 
D) supporting internal independent verification. 
A) a violation of establishment of responsibility. 
B) a violation of segregation of duties. 
C) supporting the establishment of responsibility. 
D) supporting internal independent verification.

Question 8

The petty cash fund eliminates the need for a bank checking account.

Accepted Answer

A) True 
 B)False

Question 9

If a company deposits all its receipts in the bank and pays all its bills by check, then the monthly bank statement balance will always agree with the company's record of its checking account balance.

Accepted Answer

A) True 
 B)False

Question 10

In the month of November, Coler Company Inc.wrote checks in the amount of $18,500.In December, checks in the amount of $25,316 were written.In November, $16,936 of these checks were presented to the bank for payment, and $21,766 were presented in December.What is the amount of outstanding checks at the end of November?

Accepted Answer

A) $3,550 
B) $1,564 
C) $5,114 
D) $7,100 
A) $3,550 
B) $1,564 
C) $5,114 
D) $7,100

Question 11

Cash registers are an important internal control device used in controlling over-the-counter receipts.

Accepted Answer

A) True 
 B)False

Question 12

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Accepted Answer

A) True 
 B)False

Question 13

A segregation of duties among employees eliminates the possibility of collusion.

Accepted Answer

A) True 
 B)False

Question 14

A check returned by the bank marked "NSF" means

Accepted Answer

A) no service fee. 
B) no signature found. 
C) not satisfactorily filled-out. 
D) not sufficient funds. 
A) no service fee. 
B) no signature found. 
C) not satisfactorily filled-out. 
D) not sufficient funds.

Question 15

Kline Company had checks outstanding totaling $12,800 on its May bank reconciliation.In June, Kline Company issued checks totaling $79,800.The July bank statement shows that $59,400 in checks cleared the bank in July.A check from one of Kline Company's customers in the amount of $600 was also returned marked "NSF." The amount of outstanding checks on Kline Company's July bank reconciliation should be

Accepted Answer

A) $39,200. 
B) $20,400. 
C) $33,200. 
D) $7,600. 
A) $39,200. 
B) $20,400. 
C) $33,200. 
D) $7,600.

Question 16

Replenishing the petty cash fund requires

Accepted Answer

A) a debit to Cash. 
B) a credit to Petty Cash. 
C) debits to various expense accounts. 
D) no accounting entry. 
A) a debit to Cash. 
B) a credit to Petty Cash. 
C) debits to various expense accounts. 
D) no accounting entry.

Question 17

Bellingham Company's $£ 150$ petty cash fund has cash of $£ 28$ and receipts of $£ 118$. The journal entry to replenish the account would include a

Accepted Answer

A)  debit to Cash for $£ 150$. 
B)  debit to Cash Over and Short for $£ 4$. 
C)  credit to petty Cash for $£ 118$. 
D)  credit to Cash for $£ 118$. 
A)  debit to Cash for $£ 150$. 
B)  debit to Cash Over and Short for $£ 4$. 
C)  credit to petty Cash for $£ 118$. 
D)  credit to Cash for $£ 118$.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Heath Company gathered the following reconciling information in preparing its July bank reconciliation: $\begin{array}{lr}
\text { Cash balance per books, } 7 / 31 & £ 5,500 \
\text { Deposits in transit } & 150 \
\text { Notes receivable and interest collected by bank } & 850 \
\text { Bank charge for check printing } & 20 \
\text { Outstanding checks } & 2,000 \
\text { NSF check } & 170
\end{array}$
The adjusted cash balance per books on July 31 is

Accepted Answer

A)  $ £ 6,160 $. 
B)  $ £ 6,010 $. 
C)  $ £ 4,310 $. 
D)  $ £ 4.460 $. 
A)  $ £ 6,160 $. 
B)  $ £ 6,010 $. 
C)  $ £ 4,310 $. 
D)  $ £ 4.460 $.

Question 20

A system of internal control

Accepted Answer

A) is infallible. 
B) can be rendered ineffective by employee collusion. 
C) invariably will have costs exceeding benefits. 
D) is premised on the concept of absolute assurance. 
A) is infallible. 
B) can be rendered ineffective by employee collusion. 
C) invariably will have costs exceeding benefits. 
D) is premised on the concept of absolute assurance.

Maximum benefit from independent internal verification is obtained when

A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93.The entry to replenish the fund would

Tayler Company wrote checks totaling $25,620 during October and $27,975 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?

Rainey Company wrote checks totaling $8,540 during October and $9,325 during November.$8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November.What was the amount of outstanding checks on November 30?

At June 30, Mareska Company has the following bank information: cash balance per bank $€ 7,200$ ; outstanding checks $€ 560$ ; deposits in transit $€ 1,100$ ; credit memo for interest $€ 20$ ; bank service charge $€ 40$ . What is Mareska's adjusted cash balance on June $30 ?$

Two individuals at a retail store work the same cash register.You evaluate this situation as

The petty cash fund eliminates the need for a bank checking account.

If a company deposits all its receipts in the bank and pays all its bills by check, then the monthly bank statement balance will always agree with the company's record of its checking account balance.

Cash registers are an important internal control device used in controlling over-the-counter receipts.

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

A segregation of duties among employees eliminates the possibility of collusion.

A check returned by the bank marked "NSF" means

Replenishing the petty cash fund requires

Bellingham Company's $£ 150$ petty cash fund has cash of $£ 28$ and receipts of $£ 118$ . The journal entry to replenish the account would include a

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

A system of internal control

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

Maximum benefit from independent internal verification is obtained when

A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93.The entry to replenish the fund would

Tayler Company wrote checks totaling $25,620 during October and $27,975 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?

Rainey Company wrote checks totaling $8,540 during October and $9,325 during November.$8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November.What was the amount of outstanding checks on November 30?

Two individuals at a retail store work the same cash register.You evaluate this situation as

The petty cash fund eliminates the need for a bank checking account.

If a company deposits all its receipts in the bank and pays all its bills by check, then the monthly bank statement balance will always agree with the company's record of its checking account balance.

Cash registers are an important internal control device used in controlling over-the-counter receipts.

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

A segregation of duties among employees eliminates the possibility of collusion.

A check returned by the bank marked "NSF" means

Replenishing the petty cash fund requires

Bellingham Company's £150£ 150£150 petty cash fund has cash of £28£ 28£28 and receipts of £118£ 118£118 . The journal entry to replenish the account would include a

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

A system of internal control

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

Bellingham Company's $£ 150$ petty cash fund has cash of $£ 28$ and receipts of $£ 118$ . The journal entry to replenish the account would include a