Question 1

While preparing a bank reconciliation, which of the following items would be added to the bank statement balance?

Accepted Answer

A) outstanding checks 
B) deposits in transit 
C) bank service charges 
D) interest earned on the bank account 
A) outstanding checks 
B) deposits in transit 
C) bank service charges 
D) interest earned on the bank account

Question 2

A company's internal control system must be designed and maintained by its external auditors.

Accepted Answer

A) True 
 B)False

Question 3

Money market accounts with original maturities of less than 90 days are cash equivalents.

Accepted Answer

A) True 
 B)False

Question 4

____________________ are those investments and deposits with financial institutions that are readily convertible into known amounts of cash and that have original maturities of three months or less.

Accepted Answer

The answer of ____________________ are those investments and deposits with...

Question 5

An amount recorded as an increase in the company's cash account at the end of the period, but which has not yet been reflected on the bank statement is called a(n)____________________.

Accepted Answer

The answer of An amount recorded as an increase in...

Question 6

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
-The receiving department compares the quantity of merchandise received with the quantity ordered.

Accepted Answer

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

Question 7

The foundation of the internal control system is the control _____________ - the collection of environmental factors that influence the effectiveness of control procedures.

Accepted Answer

The answer of The foundation of the internal control system...

Question 8

-Refer to Dreammaker Kitchens. What was the company's unadjusted cash balance on November 30th before the bank reconciliation process was undertaken?

Accepted Answer

A) $10,700 
B) $11,300 
C) $12,200 
D) $11,600 
A) $10,700 
B) $11,300 
C) $12,200 
D) $11,600

Question 9

On a bank reconciliation, outstanding checks are added to the cash balance per the bank statement.

Accepted Answer

A) True 
 B)False

Question 10

Which one of the following statements regarding internal control is false?

Accepted Answer

A) It is not possible to design a system of internal controls that is foolproof. 
B) A well-designed system of internal controls should be the goal of every organization whether for profit or not-for-profit. 
C) Separation of duties is the easiest control activity to implement in small companies. 
D) It is easiest to implement effective internal controls in large companies which are able to devote substantial resources to those systems. 
A) It is not possible to design a system of internal controls that is foolproof. 
B) A well-designed system of internal controls should be the goal of every organization whether for profit or not-for-profit. 
C) Separation of duties is the easiest control activity to implement in small companies. 
D) It is easiest to implement effective internal controls in large companies which are able to devote substantial resources to those systems.

Question 11

On a bank reconciliation, interest earned for the month is added to the cash balance per the company records.

Accepted Answer

A) True 
 B)False

Question 12

When a bank collects a note on behalf of a company, the bank is likely to issue a debit memo.

Accepted Answer

A) True 
 B)False

Question 13

"You Decide" Essay
You have just accepted a part-time job at one of the campus eateries. During your training the manager was called away to deal with some crisis and asked one of your co-workers to complete your training on using the cash register. The co-worker proceeds to tell you that if the money in the register drawer doesn't equal the total on the cash register tape, you will be responsible for the difference. If there is a cash shortage, you must make up the shortage out of your own pocket but if there is excess cash, you may keep the overage. Proudly, with the wink of an eye, she states, "I was short one time, right after I started working here. But I made sure, if you know what I mean, that I would never be short again."
A)Evaluate this control. Is it strong or weak? What kind of behavior will it encourage?
B)Do you have a professional obligation to report your co-worker to management? Explain.

Accepted Answer

A)This is a weak control. It encourages

Question 14

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is an example of a credit memo?

Accepted Answer

A) notice of a bank service charge 
B) notice of interest earned on a checking account 
C) outstanding checks 
D) a company's transposition error in the recording of a customer's check 
A) notice of a bank service charge 
B) notice of interest earned on a checking account 
C) outstanding checks 
D) a company's transposition error in the recording of a customer's check

Question 16

While preparing the April 30th bank reconciliation, the accountant identified the following items:   What is the company's adjusted cash balance at April 30th?

Accepted Answer

A) $12,385 
B) $12,500 
C) $14,885 
D) $17,385 
A) $12,385 
B) $12,500 
C) $14,885 
D) $17,385

Question 17

It is important that the petty cash custodian

Accepted Answer

A) sign the check that reimburses the petty cash fund. 
B) record all petty cash expenditures in the company's accounting records. 
C) prepare the bank reconciliation for the petty cash account. 
D) maintain supporting documentation for all payments made from the petty cash fund. 
A) sign the check that reimburses the petty cash fund. 
B) record all petty cash expenditures in the company's accounting records. 
C) prepare the bank reconciliation for the petty cash account. 
D) maintain supporting documentation for all payments made from the petty cash fund.

Question 18

A check returned by a bank because the issuer's cash account balance could not cover the check is called a(n)

Accepted Answer

A) outstanding check. 
B) canceled check 
C) certified check 
D) NSF check 
A) outstanding check. 
B) canceled check 
C) certified check 
D) NSF check

Question 19

A(n)____________________ is the process used by an accountant to ensure consistency between the balance shown on the bank statement for a particular account and the balance shown on the accounting records.

Accepted Answer

The answer of A(n)____________________ is the process used by an...

Question 20

When reconciling a bank account, the company has to prepare an adjusting entry for outstanding checks.

Accepted Answer

A) True 
 B)False

While preparing a bank reconciliation, which of the following items would be added to the bank statement balance?

A company's internal control system must be designed and maintained by its external auditors.

Money market accounts with original maturities of less than 90 days are cash equivalents.

____________________ are those investments and deposits with financial institutions that are readily convertible into known amounts of cash and that have original maturities of three months or less.

An amount recorded as an increase in the company's cash account at the end of the period, but which has not yet been reflected on the bank statement is called a(n)____________________.

The foundation of the internal control system is the control _____________ - the collection of environmental factors that influence the effectiveness of control procedures.

-Refer to Dreammaker Kitchens. What was the company's unadjusted cash balance on November 30th before the bank reconciliation process was undertaken?

On a bank reconciliation, outstanding checks are added to the cash balance per the bank statement.

Which one of the following statements regarding internal control is false?

On a bank reconciliation, interest earned for the month is added to the cash balance per the company records.

When a bank collects a note on behalf of a company, the bank is likely to issue a debit memo.

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Which of the following is an example of a credit memo?

While preparing the April 30th bank reconciliation, the accountant identified the following items: What is the company's adjusted cash balance at April 30th?

It is important that the petty cash custodian

A check returned by a bank because the issuer's cash account balance could not cover the check is called a(n)

A(n)____________________ is the process used by an accountant to ensure consistency between the balance shown on the bank statement for a particular account and the balance shown on the accounting records.

When reconciling a bank account, the company has to prepare an adjusting entry for outstanding checks.

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

While preparing a bank reconciliation, which of the following items would be added to the bank statement balance?

A company's internal control system must be designed and maintained by its external auditors.

Money market accounts with original maturities of less than 90 days are cash equivalents.

____________________ are those investments and deposits with financial institutions that are readily convertible into known amounts of cash and that have original maturities of three months or less.

An amount recorded as an increase in the company's cash account at the end of the period, but which has not yet been reflected on the bank statement is called a(n)____________________.

The foundation of the internal control system is the control _____________ - the collection of environmental factors that influence the effectiveness of control procedures.

-Refer to Dreammaker Kitchens. What was the company's unadjusted cash balance on November 30th before the bank reconciliation process was undertaken?

On a bank reconciliation, outstanding checks are added to the cash balance per the bank statement.

Which one of the following statements regarding internal control is false?

On a bank reconciliation, interest earned for the month is added to the cash balance per the company records.

When a bank collects a note on behalf of a company, the bank is likely to issue a debit memo.

When reconciling a bank account, the company must prepare an adjusting entry for deposits in transit.

Which of the following is an example of a credit memo?

While preparing the April 30th bank reconciliation, the accountant identified the following items: What is the company's adjusted cash balance at April 30th?

It is important that the petty cash custodian

A check returned by a bank because the issuer's cash account balance could not cover the check is called a(n)

A(n)____________________ is the process used by an accountant to ensure consistency between the balance shown on the bank statement for a particular account and the balance shown on the accounting records.

When reconciling a bank account, the company has to prepare an adjusting entry for outstanding checks.

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