Question 1

Outstanding checks refer to checks that have been:

Accepted Answer

A)  written,recorded,sent to payees,and received and paid by the bank. 
B)  written and not yet recorded in the company books. 
C)  written,recorded,sent to the payees,but not yet paid by the bank. 
D)  paid by the bank. 
A)  written,recorded,sent to payees,and received and paid by the bank. 
B)  written and not yet recorded in the company books. 
C)  written,recorded,sent to the payees,but not yet paid by the bank. 
D)  paid by the bank.

Question 2

Which of the following was not a change introduced by the Sarbanes-Oxley Act?

Accepted Answer

A)  Limits on executive compensation for most companies 
B)  Stiffer fines and maximum jail sentences for willful misrepresentation of financial results 
C)  An external audit of the effectiveness of internal controls 
D)  Anonymous tip lines and legal protection to whistle-blowers 
A)  Limits on executive compensation for most companies 
B)  Stiffer fines and maximum jail sentences for willful misrepresentation of financial results 
C)  An external audit of the effectiveness of internal controls 
D)  Anonymous tip lines and legal protection to whistle-blowers

Question 3

A process for approving and documenting all purchases and payments on account is referred to as a:

Accepted Answer

A)  voucher system. 
B)  imprest system. 
C)  reconciliation procedure. 
D)  cash receipts process. 
A)  voucher system. 
B)  imprest system. 
C)  reconciliation procedure. 
D)  cash receipts process.

Question 4

Which one of the statements appearing below is correct regarding bank reconciliations?

Accepted Answer

A)  A bank reconciliation is an external report prepared to report the cash balance to investors and creditors. 
B)  After preparing a bank reconciliation, no journal entries need to be made for outstanding checks or deposits in transit. 
C)  If a company's records show a different cash balance from that shown on the company's bank statement, either the company or the bank has made an error. 
D)  The up-to-date ending cash balance on the bank statement side should not equal the up-to-date ending cash balance on the book side. 
A)  A bank reconciliation is an external report prepared to report the cash balance to investors and creditors. 
B)  After preparing a bank reconciliation, no journal entries need to be made for outstanding checks or deposits in transit. 
C)  If a company's records show a different cash balance from that shown on the company's bank statement, either the company or the bank has made an error. 
D)  The up-to-date ending cash balance on the bank statement side should not equal the up-to-date ending cash balance on the book side.

Question 5

A check is said to have cleared the bank when:

Accepted Answer

A)  it is returned NSF. 
B)  it bounces. 
C)  the bank withdraws the amount of the check from the check writer's account. 
D)  it is presented to a financial institution for deposit or cash. 
A)  it is returned NSF. 
B)  it bounces. 
C)  the bank withdraws the amount of the check from the check writer's account. 
D)  it is presented to a financial institution for deposit or cash.

Question 6

The components of an internal control system include control environment,risk assessment,control activities,information and communication,and rationalization.

Accepted Answer

A) True 
 B)False

Question 7

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Accepted Answer

A)  documenting procedures. 
B)  segregating duties. 
C)  establishing responsibilities. 
D)  restricting access. 
A)  documenting procedures. 
B)  segregating duties. 
C)  establishing responsibilities. 
D)  restricting access.

Question 8

Which of the following items on a bank reconciliation would require a journal entry?

Accepted Answer

A)  An error by the bank 
B)  Outstanding checks 
C)  A bank service charge 
D)  A deposit in transit 
A)  An error by the bank 
B)  Outstanding checks 
C)  A bank service charge 
D)  A deposit in transit

Question 9

Which of the following items appearing on a bank reconciliation require a journal entry to bring the Cash account up-to-date?

Accepted Answer

A)  Deposit in transit 
B)  Check from customers returned as NSF 
C)  Outstanding check 
D)  An error made by the bank in recording a deposit 
A)  Deposit in transit 
B)  Check from customers returned as NSF 
C)  Outstanding check 
D)  An error made by the bank in recording a deposit

Question 10

The amount of cash available for deposit at the bank is determined from the:

Accepted Answer

A)  income statement. 
B)  bank reconciliation. 
C)  cash count sheet . 
D)  unadjusted trial balance. 
A)  income statement. 
B)  bank reconciliation. 
C)  cash count sheet . 
D)  unadjusted trial balance.

Question 11

The cash count sheet determines all of the following except the:

Accepted Answer

A)  cash shortage or overage, if any. 
B)  amount of cash available for deposit in the bank 
C)  amount of cash to be reported on the balance sheet. 
D)  amount of cash received. 
A)  cash shortage or overage, if any. 
B)  amount of cash available for deposit in the bank 
C)  amount of cash to be reported on the balance sheet. 
D)  amount of cash received.

Question 12

The following information was available to the accountant of Horton Company when preparing the monthly bank reconciliation:
 
The amount of cash that should appear on the balance sheet following completion of the reconciliation and adjustment of the accounting records is:

Accepted Answer

A)  $660. 
B)  $640. 
C)  $620. 
D)  $305. 
A)  $660. 
B)  $640. 
C)  $620. 
D)  $305.

Question 13

Which of the following is added to the bank balance on a bank reconciliation?

Accepted Answer

A)  Deposits in transit 
B)  Outstanding checks 
C)  EFT received from customers 
D)  Bank service charge 
A)  Deposits in transit 
B)  Outstanding checks 
C)  EFT received from customers 
D)  Bank service charge

Question 14

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a (n):

Accepted Answer

A)  internal audit. 
B) bank reconciliation. 
C) bank audit. 
D) trial reconciliation. 
A)  internal audit. 
B) bank reconciliation. 
C) bank audit. 
D) trial reconciliation.

Question 15

In a bank reconciliation,interest revenue earned on your bank account is:

Accepted Answer

A)  added to the book balance 
B)  deducted from the book balance 
C)  added to the bank balance 
D)  deducted from the bank balance 
A)  added to the book balance 
B)  deducted from the book balance 
C)  added to the bank balance 
D)  deducted from the bank balance

Question 16

Which of the following was passed by Congress in response to financial statement frauds that occurred in the early 2000s?

Accepted Answer

A)  Federal Accounting Standards Board Act 
B)  Securities and Exchange Act 
C)  Sarbanes-Oxley Act 
D)  Clayton Act 
A)  Federal Accounting Standards Board Act 
B)  Securities and Exchange Act 
C)  Sarbanes-Oxley Act 
D)  Clayton Act

Question 17

When the cash count sheets for the day equal $10,100 and the cash register reports $10,200,the journal entry to record the sales will include a:

Accepted Answer

A)  credit to Cash Shortage 
B)  debit to Cash Shortage 
C)  credit to Cash Overage 
D)  debit to Cash Overage 
A)  credit to Cash Shortage 
B)  debit to Cash Shortage 
C)  credit to Cash Overage 
D)  debit to Cash Overage

Question 18

A deposit in transit on last month's bank reconciliation is shown as a deposit on the bank statement this month.As a result,in preparing this period's reconciliation,the amount of this deposit should:

Accepted Answer

A)  be added to the book balance of cash. 
B)  be deducted from the book balance of cash. 
C)  be added to the bank balance of cash.? 
D)  not be included as a reconciling item. 
A)  be added to the book balance of cash. 
B)  be deducted from the book balance of cash. 
C)  be added to the bank balance of cash.? 
D)  not be included as a reconciling item.

Question 19

Deposits in transit are ______ on a bank reconciliation.

Accepted Answer

A)  added to the book balance 
B)  deducted from the bank balance 
C)  added to the bank balance 
D)  deducted from the book balance 
A)  added to the book balance 
B)  deducted from the bank balance 
C)  added to the bank balance 
D)  deducted from the book balance

Question 20

The bank credited your account for a deposit made by another bank customer.This bank error should be a(n)______ on a bank reconciliation.

Accepted Answer

A)  addition to the bank balance 
B)  deduction from the bank balance 
C)  addition to the book balance 
D)  deduction from the book balance 
A)  addition to the bank balance 
B)  deduction from the bank balance 
C)  addition to the book balance 
D)  deduction from the book balance

Outstanding checks refer to checks that have been:

Which of the following was not a change introduced by the Sarbanes-Oxley Act?

A process for approving and documenting all purchases and payments on account is referred to as a:

Which one of the statements appearing below is correct regarding bank reconciliations?

A check is said to have cleared the bank when:

The components of an internal control system include control environment,risk assessment,control activities,information and communication,and rationalization.

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Which of the following items on a bank reconciliation would require a journal entry?

Which of the following items appearing on a bank reconciliation require a journal entry to bring the Cash account up-to-date?

The amount of cash available for deposit at the bank is determined from the:

The cash count sheet determines all of the following except the:

The following information was available to the accountant of Horton Company when preparing the monthly bank reconciliation: The amount of cash that should appear on the balance sheet following completion of the reconciliation and adjustment of the accounting records is:

Which of the following is added to the bank balance on a bank reconciliation?

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a (n):

In a bank reconciliation,interest revenue earned on your bank account is:

Which of the following was passed by Congress in response to financial statement frauds that occurred in the early 2000s?

When the cash count sheets for the day equal $10,100 and the cash register reports $10,200,the journal entry to record the sales will include a:

A deposit in transit on last month's bank reconciliation is shown as a deposit on the bank statement this month.As a result,in preparing this period's reconciliation,the amount of this deposit should:

Deposits in transit are ______ on a bank reconciliation.

The bank credited your account for a deposit made by another bank customer.This bank error should be a(n)______ on a bank reconciliation.

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters

Exam 5: Fraud, Internal Control, and Cash

Outstanding checks refer to checks that have been:

Which of the following was not a change introduced by the Sarbanes-Oxley Act?

A process for approving and documenting all purchases and payments on account is referred to as a:

Which one of the statements appearing below is correct regarding bank reconciliations?

A check is said to have cleared the bank when:

The components of an internal control system include control environment,risk assessment,control activities,information and communication,and rationalization.

Assigning sequential numbers to cash sales,so that the accounting staff can ensure that every sale has been recorded is required by the internal control principle of:

Which of the following items on a bank reconciliation would require a journal entry?

Which of the following items appearing on a bank reconciliation require a journal entry to bring the Cash account up-to-date?

The amount of cash available for deposit at the bank is determined from the:

The cash count sheet determines all of the following except the:

The following information was available to the accountant of Horton Company when preparing the monthly bank reconciliation: The amount of cash that should appear on the balance sheet following completion of the reconciliation and adjustment of the accounting records is:

Which of the following is added to the bank balance on a bank reconciliation?

An internal report prepared to verify the accuracy of both the bank statement and the cash accounts of a business or individual is a (n):

In a bank reconciliation,interest revenue earned on your bank account is:

Which of the following was passed by Congress in response to financial statement frauds that occurred in the early 2000s?

When the cash count sheets for the day equal $10,100 and the cash register reports $10,200,the journal entry to record the sales will include a:

A deposit in transit on last month's bank reconciliation is shown as a deposit on the bank statement this month.As a result,in preparing this period's reconciliation,the amount of this deposit should:

Deposits in transit are ______ on a bank reconciliation.

The bank credited your account for a deposit made by another bank customer.This bank error should be a(n)______ on a bank reconciliation.

Business Decisions and Financial Accounting

Reporting Investing and Financing Results on the Balance Sheet

Reporting Operating Results on the Income Statement

Adjustments,financial Statements,and Financial Results

Internal Control and Financial Reporting for Cash and Merchandising Operations

Reporting and Interpreting Inventories and Cost of Goods Sold

Reporting and Interpreting Receivables,bad Debt Expense,and Interest Revenue

Reporting and Interpreting Long-Lived Tangible and Intangible Assets

Reporting and Interpreting Liabilities

Reporting and Interpreting Stockholders Equity

Reporting and Interpreting the Statement of Cash Flows

Measuring and Evaluating Financial Performance

Filters