Question 1

A compensating balance is excluded from the amount of cash reported on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 2

An application of good internal control over cash disbursements is

Accepted Answer

A) following payment, the approved invoice should be stamped PAID. 
B) blank checks should be stored in the treasurer's desk. 
C) each check should be compared with the approved invoice after the check is issued. 
D) check signers should record the cash disbursements. 
A) following payment, the approved invoice should be stamped PAID. 
B) blank checks should be stored in the treasurer's desk. 
C) each check should be compared with the approved invoice after the check is issued. 
D) check signers should record the cash disbursements.

Question 3

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 4

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 5

A debit memorandum could show the collection of a note receivable by the bank.

Accepted Answer

A) True 
 B)False

Question 6

Which one of the following is not necessarily a party to a check?

Accepted Answer

A) Maker 
B) Buyer 
C) Payee 
D) Payer 
A) Maker 
B) Buyer 
C) Payee 
D) Payer

Question 7

The principles of internal control include all of the following except

Accepted Answer

A) establishment of responsibility. 
B) combining of duties. 
C) physical controls. 
D) independent internal verification. 
A) establishment of responsibility. 
B) combining of duties. 
C) physical controls. 
D) independent internal verification.

Question 8

Storing cash in a company safe is an application of which internal control principle?

Accepted Answer

A) Segregation of duties 
B) Documentation procedures 
C) Physical controls 
D) Establishment of responsibility 
A) Segregation of duties 
B) Documentation procedures 
C) Physical controls 
D) Establishment of responsibility

Question 9

Deposits in transit

Accepted Answer

A) have been recorded on the company's books but not yet by the bank. 
B) have been recorded by the bank but not yet by the company. 
C) have not been recorded by the bank or the company. 
D) are checks from customers which have not yet been received by the company. 
A) have been recorded on the company's books but not yet by the bank. 
B) have been recorded by the bank but not yet by the company. 
C) have not been recorded by the bank or the company. 
D) are checks from customers which have not yet been received by the company.

Question 10

A credit balance in Cash Over and Short is reported as a(n)

Accepted Answer

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

Question 11

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Accepted Answer

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

Question 12

Cash equivalents include each of the following except

Accepted Answer

A) bank certificates of deposit. 
B) money market funds. 
C) petty cash. 
D) U.S Treasury bills. 
A) bank certificates of deposit. 
B) money market funds. 
C) petty cash. 
D) U.S Treasury bills.

Question 13

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 14

Personnel who handle cash receipts should have the option of taking a vacation or not.

Accepted Answer

A) True 
 B)False

Question 15

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

Accepted Answer

A) True 
 B)False

Question 16

A remittance advice attached to a company check provides

Accepted Answer

A) details about the running cash balance in the checking account. 
B) the magnetic bank routing numbers. 
C) an explanation of the purpose of the check. 
D) the signature space for the maker. 
A) details about the running cash balance in the checking account. 
B) the magnetic bank routing numbers. 
C) an explanation of the purpose of the check. 
D) the signature space for the maker.

Question 17

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 18

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Accepted Answer

A) True 
 B)False

Question 19

Savings accounts are usually classified as cash on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 20

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 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 CHF92.50. 
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 CHF92.50. 
D) debit to Petty Cash for CHF50.

A compensating balance is excluded from the amount of cash reported on the statement of financial position.

An application of good internal control over cash disbursements is

Related buying activities include

Replenishing the petty cash fund requires

A debit memorandum could show the collection of a note receivable by the bank.

Which one of the following is not necessarily a party to a check?

The principles of internal control include all of the following except

Storing cash in a company safe is an application of which internal control principle?

Deposits in transit

A credit balance in Cash Over and Short is reported as a(n)

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Cash equivalents include each of the following except

The custodian of a company asset should

Personnel who handle cash receipts should have the option of taking a vacation or not.

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

A remittance advice attached to a company check provides

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

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Savings accounts are usually classified as cash on the statement of financial position.

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 increase the petty cash fund would include

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 compensating balance is excluded from the amount of cash reported on the statement of financial position.

An application of good internal control over cash disbursements is

Related buying activities include

Replenishing the petty cash fund requires

A debit memorandum could show the collection of a note receivable by the bank.

Which one of the following is not necessarily a party to a check?

The principles of internal control include all of the following except

Storing cash in a company safe is an application of which internal control principle?

Deposits in transit

A credit balance in Cash Over and Short is reported as a(n)

An accounts payable clerk also has access to the approved supplier master file for purchases.The control principle of

Cash equivalents include each of the following except

The custodian of a company asset should

Personnel who handle cash receipts should have the option of taking a vacation or not.

In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry.

A remittance advice attached to a company check provides

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

The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals.

Savings accounts are usually classified as cash on the statement of financial position.

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 increase the petty cash fund would include

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