Question 1

Which of the following statements describes a receiving report?

Accepted Answer

A) It is a statement from the supplier showing the goods purchased and the amount due. 
B) It is a document authorising a payment to a supplier. 
C) It is a report showing that the goods have been received in good condition,as ordered. 
D) It is an order to purchase goods from a supplier. 
A) It is a statement from the supplier showing the goods purchased and the amount due. 
B) It is a document authorising a payment to a supplier. 
C) It is a report showing that the goods have been received in good condition,as ordered. 
D) It is an order to purchase goods from a supplier.

Question 2

In a voucher system,the vouchers are prepared by:

Accepted Answer

A) the outside supplier. 
B) the accounting department. 
C) the sales department. 
D) the purchasing department. 
A) the outside supplier. 
B) the accounting department. 
C) the sales department. 
D) the purchasing department.

Question 3

A company has a petty cash fund amount of $300.When replenished,it has petty cash slips of $30 for petrol expense,$30 for postage expense,$13 for supplies expense and $10 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited with:

Accepted Answer

A) $73 
B) $70 
C) $60 
D) $83 
A) $73 
B) $70 
C) $60 
D) $83

Question 4

If the bank reconciliation includes a book error,no journal entries are required.

Accepted Answer

A) True 
 B)False

Question 5

In the following situation,which internal control procedure needs strengthening? The controller's duties include approving bank reconciliations,approving general journal entries,hiring administrative staff,and approving various types of administrative expenses.She needs new computer equipment for the accounting office,but there are no guidelines specifying whether she can approve purchases of office equipment.

Accepted Answer

A) Documents and records 
B) Separation of duties 
C) Competent,reliable and ethical personnel 
D) Assignment of responsibilities 
A) Documents and records 
B) Separation of duties 
C) Competent,reliable and ethical personnel 
D) Assignment of responsibilities

Question 6

Which of the following is retained by the customer as proof of a deposit transaction?

Accepted Answer

A) A deposit slip 
B) A bank reconciliation 
C) A cancelled cheque 
D) A signature card 
A) A deposit slip 
B) A bank reconciliation 
C) A cancelled cheque 
D) A signature card

Question 7

The bank recorded a $2 000 deposit as $200.How would this information be included on the bank reconciliation?

Accepted Answer

A) An addition on the bank side 
B) A deduction on the book side 
C) A deduction on the bank side 
D) An addition on the book side 
A) An addition on the bank side 
B) A deduction on the book side 
C) A deduction on the bank side 
D) An addition on the book side

Question 8

In the following situation,which internal control procedure needs strengthening? Hofstra Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard.That employee has not yet been adequately trained on the maintenance needs of the equipment.

Accepted Answer

A) Documents and records 
B) Separation of duties 
C) Competent,reliable and ethical personnel 
D) Assignment of responsibilities 
A) Documents and records 
B) Separation of duties 
C) Competent,reliable and ethical personnel 
D) Assignment of responsibilities

Question 9

In a large company,the person who is responsible for writing cheques is the:

Accepted Answer

A) controller. 
B) accountant. 
C) CFO. 
D) CEO. 
A) controller. 
B) accountant. 
C) CFO. 
D) CEO.

Question 10

A purchase order is sent by the purchasing department to:

Accepted Answer

A) the outside supplier. 
B) the receiving department. 
C) the sales department. 
D) the accounting department. 
A) the outside supplier. 
B) the receiving department. 
C) the sales department. 
D) the accounting department.

Question 11

As part of the internal control over cash receipts by mail,the mailroom sends both the customer cheques and the remittance advices to the accounting department.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT an advantage of evaluated receipts settlement (ERS)?

Accepted Answer

A) It compresses the approval process into a single step. 
B) It requires fewer employees. 
C) It saves on accounting expense. 
D) It avoids the need for two signatures on a cheque. 
A) It compresses the approval process into a single step. 
B) It requires fewer employees. 
C) It saves on accounting expense. 
D) It avoids the need for two signatures on a cheque.

Question 13

'Two-factor authentication' involves logging into a computer system with a user ID and a password.

Accepted Answer

A) True 
 B)False

Question 14

The following information is available for Jade Company for the month ending 30 June 2016. ∙ Balance as per the bank statement is $11,700.
∙ Balance as per books is $10,400.
∙ Cheque #506 for $1300 and cheque #510 for $800 were not shown on the 30 June bank statement.
∙ A deposit in transit of $3000 had not been received by the bank when the bank statement was generated.
∙ A bank debit memo indicated a dishonoured cheque for $70 written by Jane Smith to Jade Company on 13 June.
∙ A bank credit memo indicated bank collections of $2200 and interest revenue of $52 on 20 June.
∙ The bank statement indicated service charges of $20.
What is the adjusted book balance?

Accepted Answer

A) $8352 
B) $8300 
C) $12,562 
D) $12,582 
A) $8352 
B) $8300 
C) $12,562 
D) $12,582

Question 15

Which of the following describes the internal control procedure competent,reliable and ethical personnel?

Accepted Answer

A) External auditors monitor internal controls. 
B) A company purchases burglar alarms. 
C) A company must train and supervise high-quality employees. 
D) The information system is critical. 
A) External auditors monitor internal controls. 
B) A company purchases burglar alarms. 
C) A company must train and supervise high-quality employees. 
D) The information system is critical.

Question 16

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus petty cash slips)totalling the same amount.

Accepted Answer

A) True 
 B)False

Question 17

An accountant is under pressure to maximise the company's profit at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following items are both reconciling items on the bank side of the reconciliation?

Accepted Answer

A) Deposit in transit and dishonoured cheques 
B) Outstanding cheques and correction of book error 
C) Bank service charge and correction of book error 
D) Deposit in transit and outstanding cheques 
A) Deposit in transit and dishonoured cheques 
B) Outstanding cheques and correction of book error 
C) Bank service charge and correction of book error 
D) Deposit in transit and outstanding cheques

Question 19

Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of sales and,thus,a higher profit.This action would be considered unethical because it is not a legitimate business transaction.

Accepted Answer

A) True 
 B)False

Question 20

When a cheque is issued,the party being paid the cash is referred to as the:

Accepted Answer

A) payee. 
B) depositor. 
C) bank signatory. 
D) drawer. 
A) payee. 
B) depositor. 
C) bank signatory. 
D) drawer.

Which of the following statements describes a receiving report?

In a voucher system,the vouchers are prepared by:

A company has a petty cash fund amount of $300.When replenished,it has petty cash slips of $30 for petrol expense,$30 for postage expense,$13 for supplies expense and $10 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited with:

If the bank reconciliation includes a book error,no journal entries are required.

Which of the following is retained by the customer as proof of a deposit transaction?

The bank recorded a $2 000 deposit as $200.How would this information be included on the bank reconciliation?

In the following situation,which internal control procedure needs strengthening? Hofstra Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard.That employee has not yet been adequately trained on the maintenance needs of the equipment.

In a large company,the person who is responsible for writing cheques is the:

A purchase order is sent by the purchasing department to:

As part of the internal control over cash receipts by mail,the mailroom sends both the customer cheques and the remittance advices to the accounting department.

Which of the following is NOT an advantage of evaluated receipts settlement (ERS)?

'Two-factor authentication' involves logging into a computer system with a user ID and a password.

Which of the following describes the internal control procedure competent,reliable and ethical personnel?

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus petty cash slips)totalling the same amount.

An accountant is under pressure to maximise the company's profit at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

Which of the following items are both reconciling items on the bank side of the reconciliation?

Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of sales and,thus,a higher profit.This action would be considered unethical because it is not a legitimate business transaction.

When a cheque is issued,the party being paid the cash is referred to as the:

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters

Exam 8: Internal Control and Cash

Which of the following statements describes a receiving report?

In a voucher system,the vouchers are prepared by:

A company has a petty cash fund amount of $300.When replenished,it has petty cash slips of $30 for petrol expense,$30 for postage expense,$13 for supplies expense and $10 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited with:

If the bank reconciliation includes a book error,no journal entries are required.

Which of the following is retained by the customer as proof of a deposit transaction?

The bank recorded a $2 000 deposit as $200.How would this information be included on the bank reconciliation?

In the following situation,which internal control procedure needs strengthening? Hofstra Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard.That employee has not yet been adequately trained on the maintenance needs of the equipment.

In a large company,the person who is responsible for writing cheques is the:

A purchase order is sent by the purchasing department to:

As part of the internal control over cash receipts by mail,the mailroom sends both the customer cheques and the remittance advices to the accounting department.

Which of the following is NOT an advantage of evaluated receipts settlement (ERS)?

'Two-factor authentication' involves logging into a computer system with a user ID and a password.

Which of the following describes the internal control procedure competent,reliable and ethical personnel?

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account,supported by the fund (cash plus petty cash slips)totalling the same amount.

An accountant is under pressure to maximise the company's profit at year-end.He is told to delay orders of important services until the following year.This action would be considered unethical because it is a misrepresentation of actual transactions.

Which of the following items are both reconciling items on the bank side of the reconciliation?

Around the end of the year,an accountant orders a shipment of inventory earlier than normally scheduled because she knows that it will result in lower cost of sales and,thus,a higher profit.This action would be considered unethical because it is not a legitimate business transaction.

When a cheque is issued,the party being paid the cash is referred to as the:

The Role of Accounting in Decision Making

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Current Liabilities and Payroll

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Formation and Shareholders Equity

Companies: Capital Management and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Filters