Question 1

Procedures requiring that the recording of asset transactions be separated from the custody of those assets:

Accepted Answer

A)  Will uncover collusion among employees 
B)  Are important only in very large businesses 
C)  Are especially important in handling cash 
D)  Make it easy for an employee to cover up the theft of an asset 
E)  None of the above 
A)  Will uncover collusion among employees 
B)  Are important only in very large businesses 
C)  Are especially important in handling cash 
D)  Make it easy for an employee to cover up the theft of an asset 
E)  None of the above

Question 2

From the viewpoint of good internal accounting control, which of the following individuals would be the proper person to prepare bank reconciliations for a company that receives cash payments both through the mail and from customers in person?

Accepted Answer

A)  The individual who opens the company's mail and lists the payments received 
B)  The individual who works in the customer service department and receives payments from customers who pay in person 
C)  The individual who deposits the daily cash receipts in the bank 
D)  Any of the above individuals would be appropriate 
E)  None of the above 
A)  The individual who opens the company's mail and lists the payments received 
B)  The individual who works in the customer service department and receives payments from customers who pay in person 
C)  The individual who deposits the daily cash receipts in the bank 
D)  Any of the above individuals would be appropriate 
E)  None of the above

Question 3

Williams Inc.'s June bank statement shows a June 30 balance of $9,050. Prior to reconciliation, its books show a cash balance of $9,210. The information below pertains to Williams:
 
 The reconciled cash balance at June 30 on the bank reconciliation should be:

Accepted Answer

A)  $10,100 
B)  $ 9,520 
C)  $ 9,340 
D)  $ 9,270 
E)  None of the above 
A)  $10,100 
B)  $ 9,520 
C)  $ 9,340 
D)  $ 9,270 
E)  None of the above

Question 4

The bank statement reported an ending balance of $14,620 after deducting $220 in service charges and an addition of $4,500 for a note collected by the bank on the company's behalf. The company books reported an ending balance of $9,690, and determined that deposits in transit equal $5,600 and outstanding checks equal $6,250.
What is the adjusted cash balance?

Accepted Answer

A)  $13,970 
B)  $ 5,600 
C)  $11,970 
D)  $ 7,040 
A)  $13,970 
B)  $ 5,600 
C)  $11,970 
D)  $ 7,040

Question 5

The following adjustment is necessary upon discovery of a "NSF" check during a bank reconciliation:

Accepted Answer

A)  Increase Accounts Receivable; decrease cash 
B)  Increase Not Sufficient Funds Expense; decrease Cash 
C)  Increase Miscellaneous Expense; decrease Cash 
D)  No adjustment is necessary because the bank makes the entry. 
E)  None of the above 
A)  Increase Accounts Receivable; decrease cash 
B)  Increase Not Sufficient Funds Expense; decrease Cash 
C)  Increase Miscellaneous Expense; decrease Cash 
D)  No adjustment is necessary because the bank makes the entry. 
E)  None of the above

Question 6

It is efficient, less costly, and a good internal accounting control procedure to pay small bills each day with cash available from daily cash receipts.

Accepted Answer

A) True 
 B)False

Question 7

Three elements of the fraud triangle include perceived pressure; a way to rationalize the fraudulent act; and a perceived opportunity.

Accepted Answer

A) True 
 B)False

Question 8

Identify and discuss the four primary activities of effective cash management.

Accepted Answer

1. Manage accounts receivable - the mana

Question 9

In preparing its bank reconciliation at March 31, Chioda Company has the following information:
  What is the proper cash balance at March 31 for balance sheet purposes?

Accepted Answer

A)  $35,750 
B)  $36,750 
C)  $36,800 
D)  $37,050 
E)  None of the above 
A)  $35,750 
B)  $36,750 
C)  $36,800 
D)  $37,050 
E)  None of the above

Question 10

Which of the following is not a feature of good internal accounting control over cash?

Accepted Answer

A)  All cash receipts are deposited in the bank each day. 
B)  Most bills are paid with paper currency and coins to minimize the bank service charges. 
C)  A bank reconciliation is prepared when each bank statement is received. 
D)  Cash is handled separately from the recording of cash transactions. 
E)  All of the above are part of a good system of internal accounting control over cash. 
A)  All cash receipts are deposited in the bank each day. 
B)  Most bills are paid with paper currency and coins to minimize the bank service charges. 
C)  A bank reconciliation is prepared when each bank statement is received. 
D)  Cash is handled separately from the recording of cash transactions. 
E)  All of the above are part of a good system of internal accounting control over cash.

Question 11

A company implements internal controls to improve the chances that employee will function according to the plans and standard operating procedures developed by the management team.

Accepted Answer

A) True 
 B)False

Question 12

Use the following information to prepare a bank reconciliation for Larkin Company at August 31, 2019: 
(1) Cash account balance, August 31, $10,335.30.
(2) Bank statement balance, August 31, $12,380.50.
(3) Deposits in transit, $960.00.
(4) Outstanding checks, August 31, $3,190.20.
(5) Service charge on bank statement not recorded in books, $25.00.
(6) Bank error--another company's check charged on Larkin Company's bank statement, $250.00.
(7) Check for repairs expense, $670.00, incorrectly recorded in books as $760.00.

Accepted Answer

The answer of Use the following information to prepare a...

Question 13

Disbursements from a petty cash fund should be made with checks that are prenumbered.

Accepted Answer

A) True 
 B)False

Question 14

At May 31, Robinson Company has outstanding checks totaling $9,800. The bank reconciliation for May should show these checks as a(n):

Accepted Answer

A)  Deduction from balance per bank statement 
B)  Addition to balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger 
E)  None of the above 
A)  Deduction from balance per bank statement 
B)  Addition to balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger 
E)  None of the above

Question 15

A control activity can be either a prevention control or a monitoring control.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is desirable in a good system of internal accounting control?

Accepted Answer

A)  Responsibility and authority for a given function should be shared among several employees 
B)  Appropriate forms, such as checks and sales invoices, should have preprinted control numbers 
C)  All accounting personnel in a firm should be bonded 
D)  To obtain the benefit of specialization, employees should not be rotated among similar jobs 
E)  None of the above 
A)  Responsibility and authority for a given function should be shared among several employees 
B)  Appropriate forms, such as checks and sales invoices, should have preprinted control numbers 
C)  All accounting personnel in a firm should be bonded 
D)  To obtain the benefit of specialization, employees should not be rotated among similar jobs 
E)  None of the above

Question 17

An operational audit is an examination of a company's annual financial statements by a firm of independent certified public accountants.

Accepted Answer

A) True 
 B)False

Question 18

The most effective tool for external parties to monitor a company's cash is the income statement.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is desirable in a good system of internal accounting controls?

Accepted Answer

A)  Develop plans and budgets 
B)  Encourage employee collusion 
C)  Maintain adequate accounting records 
D)  Two of the above 
E)  None of the above 
A)  Develop plans and budgets 
B)  Encourage employee collusion 
C)  Maintain adequate accounting records 
D)  Two of the above 
E)  None of the above

Question 20

First State Bank collected a note for Smith Company. This collection, not yet recorded in Smith's books, appears on the bank reconciliation as a(n):

Accepted Answer

A)  Addition to balance per general ledger 
B)  Deduction from balance per bank statement 
C)  Addition to balance per bank statement 
D)  Deduction from balance per general ledger 
E)  None of the above 
A)  Addition to balance per general ledger 
B)  Deduction from balance per bank statement 
C)  Addition to balance per bank statement 
D)  Deduction from balance per general ledger 
E)  None of the above

Procedures requiring that the recording of asset transactions be separated from the custody of those assets:

From the viewpoint of good internal accounting control, which of the following individuals would be the proper person to prepare bank reconciliations for a company that receives cash payments both through the mail and from customers in person?

Williams Inc.'s June bank statement shows a June 30 balance of $9,050. Prior to reconciliation, its books show a cash balance of $9,210. The information below pertains to Williams: The reconciled cash balance at June 30 on the bank reconciliation should be:

The following adjustment is necessary upon discovery of a "NSF" check during a bank reconciliation:

It is efficient, less costly, and a good internal accounting control procedure to pay small bills each day with cash available from daily cash receipts.

Three elements of the fraud triangle include perceived pressure; a way to rationalize the fraudulent act; and a perceived opportunity.

Identify and discuss the four primary activities of effective cash management.

In preparing its bank reconciliation at March 31, Chioda Company has the following information: What is the proper cash balance at March 31 for balance sheet purposes?

Which of the following is not a feature of good internal accounting control over cash?

A company implements internal controls to improve the chances that employee will function according to the plans and standard operating procedures developed by the management team.

Disbursements from a petty cash fund should be made with checks that are prenumbered.

At May 31, Robinson Company has outstanding checks totaling $9,800. The bank reconciliation for May should show these checks as a(n):

A control activity can be either a prevention control or a monitoring control.

Which of the following is desirable in a good system of internal accounting control?

An operational audit is an examination of a company's annual financial statements by a firm of independent certified public accountants.

The most effective tool for external parties to monitor a company's cash is the income statement.

Which of the following is desirable in a good system of internal accounting controls?

First State Bank collected a note for Smith Company. This collection, not yet recorded in Smith's books, appears on the bank reconciliation as a(n):

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Receivables

Inventory

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

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Exam 5: Internal Control and Cash

Procedures requiring that the recording of asset transactions be separated from the custody of those assets:

From the viewpoint of good internal accounting control, which of the following individuals would be the proper person to prepare bank reconciliations for a company that receives cash payments both through the mail and from customers in person?

Williams Inc.'s June bank statement shows a June 30 balance of $9,050. Prior to reconciliation, its books show a cash balance of $9,210. The information below pertains to Williams: The reconciled cash balance at June 30 on the bank reconciliation should be:

The following adjustment is necessary upon discovery of a "NSF" check during a bank reconciliation:

It is efficient, less costly, and a good internal accounting control procedure to pay small bills each day with cash available from daily cash receipts.

Three elements of the fraud triangle include perceived pressure; a way to rationalize the fraudulent act; and a perceived opportunity.

Identify and discuss the four primary activities of effective cash management.

In preparing its bank reconciliation at March 31, Chioda Company has the following information: What is the proper cash balance at March 31 for balance sheet purposes?

Which of the following is not a feature of good internal accounting control over cash?

A company implements internal controls to improve the chances that employee will function according to the plans and standard operating procedures developed by the management team.

Disbursements from a petty cash fund should be made with checks that are prenumbered.

At May 31, Robinson Company has outstanding checks totaling $9,800. The bank reconciliation for May should show these checks as a(n):

A control activity can be either a prevention control or a monitoring control.

Which of the following is desirable in a good system of internal accounting control?

An operational audit is an examination of a company's annual financial statements by a firm of independent certified public accountants.

The most effective tool for external parties to monitor a company's cash is the income statement.

Which of the following is desirable in a good system of internal accounting controls?

First State Bank collected a note for Smith Company. This collection, not yet recorded in Smith's books, appears on the bank reconciliation as a(n):

Financial Accounting and Business Decisions

Processing Accounting Information

Accrual Basis of Accounting

Understanding Accounting Information

Receivables

Inventory

Property, Plant and Equipment and Intangible Assets

Liabilities

Stockholders Equity

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Appendix A: The Language of Accountants: Debits and Credits

Appendix B: Accounting for Investments and Consolidated Financial Statements

Appendix C: Accounting and the Time Value of Money

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