Question 1

Which internal control activity is followed when the work of one department acts as a check on the work of another?

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

Question 2

Effective cash management and control for a company's operating cycle includes all of the following except

Accepted Answer

A) the use of a petty cash fund. 
B) the preparation of monthly bank reconciliations. 
C) the practice of using surplus cash for the purchase of bonds or other long-term investments. 
D) the practice of keeping inventory levels low. 
A) the use of a petty cash fund. 
B) the preparation of monthly bank reconciliations. 
C) the practice of using surplus cash for the purchase of bonds or other long-term investments. 
D) the practice of keeping inventory levels low.

Question 3

The operating cycle is the elapsed time between the

Accepted Answer

A) purchase of goods or services and the ultimate collection of cash from customers related to the sale of those goods. 
B) sale of goods or services to customers and the payment to suppliers for those goods. 
C) purchase of goods from suppliers and the performance of the related service for customers. 
D) sale of goods and the delivery of those goods to customers. 
A) purchase of goods or services and the ultimate collection of cash from customers related to the sale of those goods. 
B) sale of goods or services to customers and the payment to suppliers for those goods. 
C) purchase of goods from suppliers and the performance of the related service for customers. 
D) sale of goods and the delivery of those goods to customers.

Question 4

Petty Cash is NOT considered to be a cash equivalent.

Accepted Answer

A) True 
 B)False

Question 5

A petty cash fund for $300 was established on May 1. By the end of the month, the petty cash custodian requested reimbursement of $222 for the following expenditures from the fund:
   Record the entries to a)establish the petty cash fund; b)replenish the fund as of the end of May and c)increase the fund balance to $500.

Accepted Answer

The answer of A petty cash fund for $300 was...

Question 6

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the bank statement?

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 7

During the bank reconciliation process, an accountant identified an error. A check written for $20 to pay a supplier for goods purchased on credit was erroneously recorded in the company's records for $200. Which of the following entries would correct this error?

Accepted Answer

A) Cash 180 Accounts Payable 180 
B) Cash 180 Accounts Receivable 180 
C) Account Receivable 180 Accounts Payable 180 
D) None of these, as the error should be corrected by the supplier's personnel 
A) Cash 180 Accounts Payable 180 
B) Cash 180 Accounts Receivable 180 
C) Account Receivable 180 Accounts Payable 180 
D) None of these, as the error should be corrected by the supplier's personnel

Question 8

MATCHING
The accountant for a local manufacturing company is reconciling the company's bank account for May. For each item listed, state how it would be handled on a bank reconciliation. (Choices may be used more than once.)
a.Addition to bank balance
b.Subtraction from bank balance
c.Addition to company balance
d.Subtraction from company balance
e.Not included on the reconciliation
-Customer's check was deposited on May 31 but is not included on the bank statement

Accepted Answer

The answer of MATCHING
The accountant for a local manufacturing company...

Question 9

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 clerk in the accounting department records both purchases and payments of invoices.

Accepted Answer

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

Question 10

On June 30, a company had $1,924 in its cash account according to its general ledger. This included a deposit of $174 that was in transit on June 30th. The June 30th bank statement contained the following information:   Assuming outstanding checks of $338, what is the company's adjusted cash balance at June 30th?

Accepted Answer

A) $1,840 
B) $1,880 
C) $2,014 
D) $2,178 
A) $1,840 
B) $1,880 
C) $2,014 
D) $2,178

Question 11

Which one of the following would never be considered a cash equivalent?

Accepted Answer

A) U.S. Treasury bills 
B) corporate commercial paper 
C) money market funds 
D) common stock issued by a corporation 
A) U.S. Treasury bills 
B) corporate commercial paper 
C) money market funds 
D) common stock issued by a corporation

Question 12

An internal control activity that separates responsibilities so that no one person handles all the tasks for a particular activity is referred to as ____________________.

Accepted Answer

segregatio

Question 13

No special internal control procedures are necessary with a petty cash fund because the amount is so small.

Accepted Answer

A) True 
 B)False

Question 14

The only essential element of internal control from the following is

Accepted Answer

A) Computerized accounting systems 
B) An outsourced internal audit function 
C) Procedures for proper authorization of transactions 
D) Verification by government agencies 
A) Computerized accounting systems 
B) An outsourced internal audit function 
C) Procedures for proper authorization of transactions 
D) Verification by government agencies

Question 15

Diamond Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for October 2013 indicated the following:
   An analysis of canceled checks and deposits and the records of Diamond revealed the following items:
   The correct amount of check # 627 is $980, but it was recorded as a cash disbursement of $890. The check was issued to pay for merchandise purchased. The check was written correctly and appeared on the bank statement correctly.

Accepted Answer

The answer of Diamond Corp. prepares monthly bank reconciliations of...

Question 16

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the company records?

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 17

Which of the following items would be added to the company's cash balance on a bank reconciliation?

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 18

Under the ____________________ Act, management of publicly-traded corporations has increased responsibility for a system of internal controls that ensures reliability of financial statements.

Accepted Answer

The answer of Under the ____________________ Act, management of publicly-traded...

Question 19

In anticipation of preparing the July bank reconciliation, the accountant gathered the following information:   What is the company's adjusted cash balance at July 31st?

Accepted Answer

A) $4,300 
B) $4,050 
C) $4,140 
D) $4,500 
A) $4,300 
B) $4,050 
C) $4,140 
D) $4,500

Question 20

Internal control over financial reporting is concerned with ensuring the reliability of the financial statements.

Accepted Answer

A) True 
 B)False

Which internal control activity is followed when the work of one department acts as a check on the work of another?

Effective cash management and control for a company's operating cycle includes all of the following except

The operating cycle is the elapsed time between the

Petty Cash is NOT considered to be a cash equivalent.

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the bank statement?

During the bank reconciliation process, an accountant identified an error. A check written for $20 to pay a supplier for goods purchased on credit was erroneously recorded in the company's records for $200. Which of the following entries would correct this error?

Which one of the following would never be considered a cash equivalent?

An internal control activity that separates responsibilities so that no one person handles all the tasks for a particular activity is referred to as ____________________.

No special internal control procedures are necessary with a petty cash fund because the amount is so small.

The only essential element of internal control from the following is

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the company records?

Which of the following items would be added to the company's cash balance on a bank reconciliation?

Under the ____________________ Act, management of publicly-traded corporations has increased responsibility for a system of internal controls that ensures reliability of financial statements.

In anticipation of preparing the July bank reconciliation, the accountant gathered the following information: What is the company's adjusted cash balance at July 31st?

Internal control over financial reporting is concerned with ensuring the reliability of the financial statements.

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 internal control activity is followed when the work of one department acts as a check on the work of another?

Effective cash management and control for a company's operating cycle includes all of the following except

The operating cycle is the elapsed time between the

Petty Cash is NOT considered to be a cash equivalent.

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the bank statement?

During the bank reconciliation process, an accountant identified an error. A check written for $20 to pay a supplier for goods purchased on credit was erroneously recorded in the company's records for $200. Which of the following entries would correct this error?

Which one of the following would never be considered a cash equivalent?

An internal control activity that separates responsibilities so that no one person handles all the tasks for a particular activity is referred to as ____________________.

No special internal control procedures are necessary with a petty cash fund because the amount is so small.

The only essential element of internal control from the following is

While preparing a bank reconciliation, which of the following items would be subtracted from the balance per the company records?

Which of the following items would be added to the company's cash balance on a bank reconciliation?

Under the ____________________ Act, management of publicly-traded corporations has increased responsibility for a system of internal controls that ensures reliability of financial statements.

In anticipation of preparing the July bank reconciliation, the accountant gathered the following information: What is the company's adjusted cash balance at July 31st?

Internal control over financial reporting is concerned with ensuring the reliability of the financial statements.

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