Question 1

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. C

Question 2

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  False

Question 3

Internal auditors

Accepted Answer

A) are hired by accounting firms to audit business firms. 
B) are employees of the taxing authority who evaluate the internal controls of companies filing tax returns. 
C) evaluate the system of internal controls for the companies that employ them. 
D) cannot evaluate the system of internal controls of the company that employs them because they are not independent. 
A) are hired by accounting firms to audit business firms. 
B) are employees of the taxing authority who evaluate the internal controls of companies filing tax returns. 
C) evaluate the system of internal controls for the companies that employ them. 
D) cannot evaluate the system of internal controls of the company that employs them because they are not independent. C

Question 4

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 5

Franco Company wrote checks totaling €18,545 during June and €19,325 during July.In June, €18,125 of these checks cleared the bank.In July, checks of €19,115 cleared the bank.What was the amount of outstanding checks at July 31?

Accepted Answer

A) €210. 
B) €420. 
C) €630. 
D) €990. 
A) €210. 
B) €420. 
C) €630. 
D) €990.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Use the following information to answer questions   On July 31, the office manager gives instruction to increase the petty cash fund to CHF300.
-The journal entry to replenish the petty cash fund would include a

Accepted Answer

A) debit to petty Cash for CHF250. 
B) credit to Cash Over and Short for CHF17. 
C) credit to Cash for CHF242.50. 
D) debit to Accounts Receivable for CHF17. 
A) debit to petty Cash for CHF250. 
B) credit to Cash Over and Short for CHF17. 
C) credit to Cash for CHF242.50. 
D) debit to Accounts Receivable for CHF17.

Question 8

Allowing only designated personnel to handle cash receipts is an example of

Accepted Answer

A) establishment of responsibility. 
B) segregation of duties. 
C) documentation procedures. 
D) independent internal verification. 
A) establishment of responsibility. 
B) segregation of duties. 
C) documentation procedures. 
D) independent internal verification.

Question 9

A $100 petty cash fund has cash of $17 and receipts of $80.The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for $80. 
B) credit to Petty Cash for $83. 
C) debit to Cash Over and Short for $3. 
D) credit to Cash for $80. 
A) debit to Cash for $80. 
B) credit to Petty Cash for $83. 
C) debit to Cash Over and Short for $3. 
D) credit to Cash for $80.

Question 10

Petty cash funds are not included in the cash balance reported on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 11

The use of remittance advices for mail receipts is an example of

Accepted Answer

A) documentation procedures. 
B) human resource controls. 
C) physical controls. 
D) independent internal verification. 
A) documentation procedures. 
B) human resource controls. 
C) physical controls. 
D) independent internal verification.

Question 12

Controls that enhance the accuracy and reliability of the accounting records are

Accepted Answer

A) automated controls. 
B) external controls. 
C) physical controls. 
D) human resource. 
A) automated controls. 
B) external controls. 
C) physical controls. 
D) human resource.

Question 13

Which one of the following is not an objective of a system of internal controls?

Accepted Answer

A) Safeguard company assets 
B) Overstate liabilities in order to be conservative 
C) Enhance the accuracy and reliability of accounting records 
D) Increase efficiency of operations 
A) Safeguard company assets 
B) Overstate liabilities in order to be conservative 
C) Enhance the accuracy and reliability of accounting records 
D) Increase efficiency of operations

Question 14

If a petty cash fund is established in the amount of ₤250, and contains ₤150 in cash and ₤95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

Accepted Answer

A) Petty Cash, ₤95. 
B) Petty Cash, ₤100. 
C) Cash, ₤95; Cash Over and Short, ₤5. 
D) Cash, ₤100. 
A) Petty Cash, ₤95. 
B) Petty Cash, ₤100. 
C) Cash, ₤95; Cash Over and Short, ₤5. 
D) Cash, ₤100.

Question 15

If a check correctly written and paid by the bank for ¥4,910 is incorrectly recorded on the company's books for ¥4,190, the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A) add ¥720 to the book's balance. 
B) subtract ¥720 from the book's balance. 
C) deduct ¥720 from the bank's balance. 
D) deduct ¥4,910 from the book's balance. 
A) add ¥720 to the book's balance. 
B) subtract ¥720 from the book's balance. 
C) deduct ¥720 from the bank's balance. 
D) deduct ¥4,910 from the book's balance.

Question 16

Entries are made to the Petty Cash account when

Accepted Answer

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

Question 17

Le Bateau Manufacturing Inc.gathered the following reconciling information in preparing its May bank reconciliation:   The adjusted cash balance per books on May 31 is

Accepted Answer

A) €9,460. 
B) €10,390. 
C) €15,120. 
D) €15,130. 
A) €9,460. 
B) €10,390. 
C) €15,120. 
D) €15,130.

Question 18

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF80.The journal entry to replenish the account would include a

Accepted Answer

A) debit to Cash for CHF80. 
B) credit to Petty Cash for CHF110. 
C) debit to Cash Over and Short for CHF3. 
D) credit to cash for CHF80. 
A) debit to Cash for CHF80. 
B) credit to Petty Cash for CHF110. 
C) debit to Cash Over and Short for CHF3. 
D) credit to cash for CHF80.

Question 19

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 20

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.

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

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

Internal auditors

Franco Company wrote checks totaling €18,545 during June and €19,325 during July.In June, €18,125 of these checks cleared the bank.In July, checks of €19,115 cleared the bank.What was the amount of outstanding checks at July 31?

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

Use the following information to answer questions On July 31, the office manager gives instruction to increase the petty cash fund to CHF300. -The journal entry to replenish the petty cash fund would include a

Allowing only designated personnel to handle cash receipts is an example of

A $100 petty cash fund has cash of $17 and receipts of $80.The journal entry to replenish the account would include a

Petty cash funds are not included in the cash balance reported on the statement of financial position.

The use of remittance advices for mail receipts is an example of

Controls that enhance the accuracy and reliability of the accounting records are

Which one of the following is not an objective of a system of internal controls?

If a petty cash fund is established in the amount of ₤250, and contains ₤150 in cash and ₤95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

If a check correctly written and paid by the bank for ¥4,910 is incorrectly recorded on the company's books for ¥4,190, the appropriate treatment on the bank reconciliation would be to

Entries are made to the Petty Cash account when

Le Bateau Manufacturing Inc.gathered the following reconciling information in preparing its May bank reconciliation: The adjusted cash balance per books on May 31 is

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF80.The journal entry to replenish the account would include a

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

A bank statement

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

Payroll Accounting

Other Significant Liabilities

Filters

Exam 7: Fraud, Internal Control, and Cash

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

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

Internal auditors

Franco Company wrote checks totaling €18,545 during June and €19,325 during July.In June, €18,125 of these checks cleared the bank.In July, checks of €19,115 cleared the bank.What was the amount of outstanding checks at July 31?

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

Use the following information to answer questions On July 31, the office manager gives instruction to increase the petty cash fund to CHF300. -The journal entry to replenish the petty cash fund would include a

Allowing only designated personnel to handle cash receipts is an example of

A $100 petty cash fund has cash of $17 and receipts of $80.The journal entry to replenish the account would include a

Petty cash funds are not included in the cash balance reported on the statement of financial position.

The use of remittance advices for mail receipts is an example of

Controls that enhance the accuracy and reliability of the accounting records are

Which one of the following is not an objective of a system of internal controls?

If a petty cash fund is established in the amount of ₤250, and contains ₤150 in cash and ₤95 in receipts for disbursements when it is replenished, the journal entry to record replenishment should include credits to the following accounts

If a check correctly written and paid by the bank for ¥4,910 is incorrectly recorded on the company's books for ¥4,190, the appropriate treatment on the bank reconciliation would be to

Entries are made to the Petty Cash account when

Le Bateau Manufacturing Inc.gathered the following reconciling information in preparing its May bank reconciliation: The adjusted cash balance per books on May 31 is

A CHF110 petty cash fund has cash of CHF27 and receipts of CHF80.The journal entry to replenish the account would include a

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

A bank statement

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

Payroll Accounting

Other Significant Liabilities

Filters