Question 1

Which of the assets listed below is considered the most liquid?

Accepted Answer

A) Accounts receivable 
B) Cash 
C) Inventory 
D) Prepaid insurance 
A) Accounts receivable 
B) Cash 
C) Inventory 
D) Prepaid insurance B

Question 2

A debit memo appeared on the May bank statement. How should this amount be treated on the May bank reconciliation?

Accepted Answer

A) Add it to the company's balance. 
B) Add it to the bank balance. 
C) Deduct it from the company's balance. 
D) Deduct it from the bank balance. 
A) Add it to the company's balance. 
B) Add it to the bank balance. 
C) Deduct it from the company's balance. 
D) Deduct it from the bank balance. C

Question 3

Which internal control activity is followed when management authorizes the purchasing department to order goods and services for the company?

Accepted Answer

A) segregation of duties 
B) safeguarding of assets and records 
C) checks on recorded amounts 
D) clearly defined authority and responsibility 
A) segregation of duties 
B) safeguarding of assets and records 
C) checks on recorded amounts 
D) clearly defined authority and responsibility D

Question 4

Each of the following represents an effective cash management practice except

Accepted Answer

A) short-term investments should be purchased with excess cash in order to maximize the interest-earning potential. 
B) payments should be delayed as long as possible (without compromising the relationship with the payee)in order to maximize the interest-earning potential. 
C) payments should be expedited in order to simplify record keeping. 
D) receivable collections should be expedited or receivables should be sold in order to minimize the costs associated with accounting for customer accounts and servicing delinquent accounts. 
A) short-term investments should be purchased with excess cash in order to maximize the interest-earning potential. 
B) payments should be delayed as long as possible (without compromising the relationship with the payee)in order to maximize the interest-earning potential. 
C) payments should be expedited in order to simplify record keeping. 
D) receivable collections should be expedited or receivables should be sold in order to minimize the costs associated with accounting for customer accounts and servicing delinquent accounts.

Question 5

-Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books?

Accepted Answer

A) $100 decrease 
B) $300 decrease 
C) $400 decrease 
D) $600 decrease 
A) $100 decrease 
B) $300 decrease 
C) $400 decrease 
D) $600 decrease

Question 6

The account used to record the discrepancies that will occasionally occur between the amounts deposited and amounts shown on cash register tapes is called ____________________.

Accepted Answer

The answer of The account used to record the discrepancies...

Question 7

Match the following terms with their correct definition.
a.Bank reconciliation
d.Outstanding check
b.Deposit in transit
e.Service charges
c.Non-sufficient funds check
-The process of ensuring that the company's accounting records are consistent with the bank's accounting records

Accepted Answer

The answer of Match the following terms with their correct...

Question 8

What is meant by the term "cash equivalents"?

Accepted Answer

Cash equivalents are very short-term, hi

Question 9

Match the following terms with their correct definitions.
a.Accounting system
e.Internal control system
b.Business process risks
f.Safeguarding
c.Control activities
g.Segregation of duties
d.Control environment
h.Strategic risks
-Policies and procedures established by top management to help ensure that the company's accounting system and financial statements are as accurate as possible

Accepted Answer

The answer of Match the following terms with their correct...

Question 10

Whenever feasible, cash handling activities and cash record-keeping activities should be assigned to different employees, according to the internal control activity called ____________________.

Accepted Answer

segregatio

Question 11

When a bank pays interest on a company's checking account balance, the bank will likely issue a credit memo.

Accepted Answer

A) True 
 B)False

Question 12

Items that are included on a bank statement and increase the bank account balance are called ____________________.

Accepted Answer

The answer of Items that are included on a bank...

Question 13

-Refer to Designs on You. What is the net amount of the adjustments to the company's cash balance as a result of the bank reconciliation process?

Accepted Answer

A) $210 increase 
B) $135 increase 
C) $135 decrease 
D) $65 decrease 
A) $210 increase 
B) $135 increase 
C) $135 decrease 
D) $65 decrease

Question 14

Match the following terms with their correct definition.
a.Cash equivalents
c.Operating cycle
b.Cash over and short
d.Petty cash
-A fund used to pay for small amounts to avoid the time and expense of paying by check

Accepted Answer

The answer of Match the following terms with their correct...

Question 15

Strategic risk assessment is primarily concerned with

Accepted Answer

A) possible external threats to the company's success in accomplishing its objectives. 
B) allocation of the company's resources to accomplish its internal processes. 
C) safeguarding of the company's computerized assets and records. 
D) achieving operating efficiencies in the areas of production and human resources. 
A) possible external threats to the company's success in accomplishing its objectives. 
B) allocation of the company's resources to accomplish its internal processes. 
C) safeguarding of the company's computerized assets and records. 
D) achieving operating efficiencies in the areas of production and human resources.

Question 16

For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.)
a.Adheres to sound internal controls
b.Violates sound internal controls
c.Neither strengthens nor violates internal control
-Mathematical extensions and footings on purchase invoices are verified before the invoices are paid.

Accepted Answer

The answer of For each activity, identify whether or not...

Question 17

As part of a sound system of internal controls, all disbursements (with the exception of petty cash)should be made by check.

Accepted Answer

A) True 
 B)False

Question 18

Each of the following documents is used in the control of cash receipts except

Accepted Answer

A) NSF checks. 
B) outstanding checks. 
C) bank deposit slips. 
D) bank credit memos. 
A) NSF checks. 
B) outstanding checks. 
C) bank deposit slips. 
D) bank credit memos.

Question 19

For each activity, identify whether or not the activity adheres to or violates sound internal control procedures. (Choices may be used more than once.)
a.Adheres to sound internal controls
b.Violates sound internal controls
c.Neither strengthens nor violates internal control
-An employee from the accounting department compares the cash register tapes with the bank deposits.

Accepted Answer

The answer of For each activity, identify whether or not...

Question 20

Which of the following would not appear on a bank statement for a checking account?

Accepted Answer

A) service charges 
B) outstanding checks 
C) credit memos 
D) interest earned 
A) service charges 
B) outstanding checks 
C) credit memos 
D) interest earned

Which of the assets listed below is considered the most liquid?

A debit memo appeared on the May bank statement. How should this amount be treated on the May bank reconciliation?

Which internal control activity is followed when management authorizes the purchasing department to order goods and services for the company?

Each of the following represents an effective cash management practice except

-Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books?

The account used to record the discrepancies that will occasionally occur between the amounts deposited and amounts shown on cash register tapes is called ____________________.

Match the following terms with their correct definition. a.Bank reconciliation d.Outstanding check b.Deposit in transit e.Service charges c.Non-sufficient funds check -The process of ensuring that the company's accounting records are consistent with the bank's accounting records

What is meant by the term "cash equivalents"?

Whenever feasible, cash handling activities and cash record-keeping activities should be assigned to different employees, according to the internal control activity called ____________________.

When a bank pays interest on a company's checking account balance, the bank will likely issue a credit memo.

Items that are included on a bank statement and increase the bank account balance are called ____________________.

-Refer to Designs on You. What is the net amount of the adjustments to the company's cash balance as a result of the bank reconciliation process?

Match the following terms with their correct definition. a.Cash equivalents c.Operating cycle b.Cash over and short d.Petty cash -A fund used to pay for small amounts to avoid the time and expense of paying by check

Strategic risk assessment is primarily concerned with

As part of a sound system of internal controls, all disbursements (with the exception of petty cash)should be made by check.

Each of the following documents is used in the control of cash receipts except

Which of the following would not appear on a bank statement for a checking account?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 4: Internal Control and Cash

Which of the assets listed below is considered the most liquid?

A debit memo appeared on the May bank statement. How should this amount be treated on the May bank reconciliation?

Which internal control activity is followed when management authorizes the purchasing department to order goods and services for the company?

Each of the following represents an effective cash management practice except

-Refer to Dreammaker Kitchens. As a result of the bank reconciliation process, what is the net increase or decrease in cash which must be recorded on the company's books?

The account used to record the discrepancies that will occasionally occur between the amounts deposited and amounts shown on cash register tapes is called ____________________.

Match the following terms with their correct definition. a.Bank reconciliation d.Outstanding check b.Deposit in transit e.Service charges c.Non-sufficient funds check -The process of ensuring that the company's accounting records are consistent with the bank's accounting records

What is meant by the term "cash equivalents"?

Whenever feasible, cash handling activities and cash record-keeping activities should be assigned to different employees, according to the internal control activity called ____________________.

When a bank pays interest on a company's checking account balance, the bank will likely issue a credit memo.

Items that are included on a bank statement and increase the bank account balance are called ____________________.

-Refer to Designs on You. What is the net amount of the adjustments to the company's cash balance as a result of the bank reconciliation process?

Match the following terms with their correct definition. a.Cash equivalents c.Operating cycle b.Cash over and short d.Petty cash -A fund used to pay for small amounts to avoid the time and expense of paying by check

Strategic risk assessment is primarily concerned with

As part of a sound system of internal controls, all disbursements (with the exception of petty cash)should be made by check.

Each of the following documents is used in the control of cash receipts except

Which of the following would not appear on a bank statement for a checking account?

Accounting and the Financial Statements

The Accounting Information System

Accrual Accounting

Sales and Receivables

Cost of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters