Question 1

Cash,not including cash equivalents,includes:

Accepted Answer

A) Postage stamps. 
B) Coins, currency, and checking accounts. 
C) IOUs. 
D) Two-year certificates of deposit. 
E) Money market funds. 
A) Postage stamps. 
B) Coins, currency, and checking accounts. 
C) IOUs. 
D) Two-year certificates of deposit. 
E) Money market funds. B

Question 2

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash includes coins,currency,and amounts in demand deposits in banks such as checking accounts.Cash equivalents are short-term investments that meet two specific criteria.The first is that the investments must be readily convertible to a known cash amount.The second requirement is the investments should be sufficiently close to their maturity so that the market value is not sensitive to changes in interest rates.Examples of short-term investments include certificates of deposits and government treasury bills.

Question 3

Two sales clerks should not share the same cash register.This is an example of the internal control principle of _______________________.

Accepted Answer

establish responsibilities

Question 4

On a bank statement,deposits are listed as debits because the bank increases its cash account when the deposit is made.

Accepted Answer

A) True 
 B)False

Question 5

A __________________________ is a document explaining the payment of a check.

Accepted Answer

The answer of A __________________________ is a document explaining the...

Question 6

The net method for recording purchases records the purchase invoice at its net amount of any cash discount.

Accepted Answer

A) True 
 B)False

Question 7

When a petty cash fund is in use:

Accepted Answer

A) Expenses paid with petty cash are recorded when the fund is replenished. 
B) Petty Cash is debited when funds are replenished. 
C) Petty Cash is credited when funds are replenished. 
D) Expenses are not recorded. 
E) Cash is debited when funds are replenished. 
A) Expenses paid with petty cash are recorded when the fund is replenished. 
B) Petty Cash is debited when funds are replenished. 
C) Petty Cash is credited when funds are replenished. 
D) Expenses are not recorded. 
E) Cash is debited when funds are replenished.

Question 8

The document that the purchasing department prepares and sends to the vendor to place an order is the

Accepted Answer

A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval. 
A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval.

Question 9

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables the better.

Accepted Answer

A) True 
 B)False

Question 10

An employee is __________ when a company purchases an insurance policy against losses from theft by that employee.

Accepted Answer

The answer of An employee is __________ when a company...

Question 11

A key factor in a voucher system is:

Accepted Answer

A) Only approved departments and individuals are authorized to incur an obligation that will result in the payment of cash. 
B) Procedures for purchasing, receiving and paying for merchandise are divided among several departments. 
C) The system limits the individuals that can incur cash payment obligations for a company. 
D) It should be applied to all expenses. 
E) All of the choices are key factors in a voucher system. 
A) Only approved departments and individuals are authorized to incur an obligation that will result in the payment of cash. 
B) Procedures for purchasing, receiving and paying for merchandise are divided among several departments. 
C) The system limits the individuals that can incur cash payment obligations for a company. 
D) It should be applied to all expenses. 
E) All of the choices are key factors in a voucher system.

Question 12

A company established a petty cash fund of $100 on September 1.On September 10,the petty cash fund was replenished when there was $16 remaining and there were petty cash receipts for:
 office supplies,$27; transportation-in on inventory purchased,$32; and postage,$22.On September 15,the petty cash fund was increased to $125 in total.Record the above transactions in general journal form.

Accepted Answer

Sept.1 Petty Cash……………………………. 100
Cash……

Question 13

What are the steps that must be completed before an invoice approval is complete and a voucher prepared?

Accepted Answer

There are four steps that must be comple

Question 14

To streamline a voucher system,procedures for purchasing,receiving,and paying for merchandise can be performed by one department or individual.

Accepted Answer

A) True 
 B)False

Question 15

Under the net method an invoice for $2,000 with terms of 2/10,n/30 should be recorded with a debit to Inventory and a credit to Accounts Payable of $2,000.

Accepted Answer

A) True 
 B)False

Question 16

The document that is an itemized statement of goods prepared by a vendor listing the customer's name,items sold,sales prices,and terms of the sale is the

Accepted Answer

A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval. 
A) Purchase requisition. 
B) Purchase order. 
C) Invoice. 
D) Receiving report. 
E) Invoice approval.

Question 17

The entry necessary to establish a petty cash fund should include:

Accepted Answer

A) A debit to Cash and a credit to Petty Cash. 
B) A debit to Cash and a credit to Cash Over and Short. 
C) A debit to Petty Cash and a credit to Cash. 
D) A debit to Petty Cash and a credit to Accounts Receivable. 
E) A debit to Cash and a credit to Petty Cash Over and Short. 
A) A debit to Cash and a credit to Petty Cash. 
B) A debit to Cash and a credit to Cash Over and Short. 
C) A debit to Petty Cash and a credit to Cash. 
D) A debit to Petty Cash and a credit to Accounts Receivable. 
E) A debit to Cash and a credit to Petty Cash Over and Short.

Question 18

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 19

A bank statement includes:

Accepted Answer

A) A list of outstanding checks. 
B) A list of petty cash amounts. 
C) The beginning and the ending balance of the depositor's account. 
D) A listing of deposits in transit. 
E) All of the choices are included on the bank statement. 
A) A list of outstanding checks. 
B) A list of petty cash amounts. 
C) The beginning and the ending balance of the depositor's account. 
D) A listing of deposits in transit. 
E) All of the choices are included on the bank statement.

Question 20

A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations is referred to as a(n):

Accepted Answer

A) Internal cash system. 
B) Petty cash system. 
C) Cash disbursement system. 
D) Voucher system. 
E) Cash control system. 
A) Internal cash system. 
B) Petty cash system. 
C) Cash disbursement system. 
D) Voucher system. 
E) Cash control system.

Exam 8: Cash and Internal Controls

Cash,not including cash equivalents,includes:

Explain the difference between cash and cash equivalents.

Two sales clerks should not share the same cash register.This is an example of the internal control principle of _______________________.

On a bank statement,deposits are listed as debits because the bank increases its cash account when the deposit is made.

A __________________________ is a document explaining the payment of a check.

The net method for recording purchases records the purchase invoice at its net amount of any cash discount.

When a petty cash fund is in use:

The document that the purchasing department prepares and sends to the vendor to place an order is the

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables the better.

An employee is __________ when a company purchases an insurance policy against losses from theft by that employee.

A key factor in a voucher system is:

What are the steps that must be completed before an invoice approval is complete and a voucher prepared?

To streamline a voucher system,procedures for purchasing,receiving,and paying for merchandise can be performed by one department or individual.

Under the net method an invoice for $2,000 with terms of 2/10,n/30 should be recorded with a debit to Inventory and a credit to Accounts Payable of $2,000.

The document that is an itemized statement of goods prepared by a vendor listing the customer's name,items sold,sales prices,and terms of the sale is the

The entry necessary to establish a petty cash fund should include:

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

A bank statement includes:

A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations is referred to as a(n):

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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