Question 1

What account is used to record the amount of cash shortages or overages relative to a petty cash system?

Accepted Answer

A) Petty Cash Payable 
B) Gain or Loss on Petty Cash 
C) Petty Cash Expense 
D) Cash Short and Over 
A) Petty Cash Payable 
B) Gain or Loss on Petty Cash 
C) Petty Cash Expense 
D) Cash Short and Over

Question 2

List three of the five primary roles of the independent auditor (CPA).

Accepted Answer

Any three of the following:
1)Conducts a

Question 3

Use the following to answer questions
The bank statement for Tetra Company contained the following items: a bank service charge of $10;a credit memo for interest earned,$15;and a $50 NSF check from a customer.The company had outstanding checks of $100 and a deposit in transit of $300.
-Keatts Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

Accepted Answer

The answer of Use the following to answer questions
The bank...

Question 4

Chester Company has established internal control policies and procedures in order to achieve the following objectives:
1)Effective evaluation of management performance.
2)Assure that the accounting records contain reliable information.
3)Safeguard the company's assets.
4)Assure that employees comply with company policy.
Which of these objectives are achieved by accounting controls?

Accepted Answer

A) Objectives 1 and 2 
B) Objectives 2 and 3 
C) Objectives 3 and 4 
D) All four objectives 
A) Objectives 1 and 2 
B) Objectives 2 and 3 
C) Objectives 3 and 4 
D) All four objectives

Question 5

Use the following to answer questions
Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.
  
-During the process of preparing the bank reconciliation,an employee for Heath Company discovered that Check #4261 for $65,used to pay an account payable,was recorded in the company books as $56.

Accepted Answer

(D)(D)(N)(

Question 6

Which of the following statements accurately describes a fidelity bond?

Accepted Answer

A) Procedures to provide reasonable assurance that the objectives of a company are accomplished. 
B) Proper procedures for processing transactions. 
C) Insurance that the company buys to protect itself from loss due to employee dishonesty. 
D) Guidelines or policies that limit the actions of different levels of management. 
A) Procedures to provide reasonable assurance that the objectives of a company are accomplished. 
B) Proper procedures for processing transactions. 
C) Insurance that the company buys to protect itself from loss due to employee dishonesty. 
D) Guidelines or policies that limit the actions of different levels of management.

Question 7

On May 1,2016,Campbell Company established a petty cash fund in the amount of $400.
a)Is the establishment of the fund an asset source,asset use,or asset exchange transaction?
b)Record the establishment of the petty cash fund in the horizontal financial statements model,below.Show dollar amounts of increases and decreases;for accounts that are not affected,indicate NA.If the event affects cash flow,classify the cash flow as operating,investing,or financing.

Accepted Answer

a)Establishment of t

Question 8

At March 31,Cummins Co.had a balance in its cash account of $10,400.At the end of March the company determined that it had outstanding checks of $900,deposits in transit of $600,a bank service charge of $20,and an NSF check from a customer for $200.The true cash balance at March 31 is:

Accepted Answer

A) $10,100 
B) $10,180 
C) $10,380 
D) $9,880 
A) $10,100 
B) $10,180 
C) $10,380 
D) $9,880

Question 9

Indicate whether each of the following items regarding internal control is true or false.
_____ a)Accounting controls are composed of procedures designed to safeguard assets and ensure accounting records contain reliable information.
_____ b)Administrative controls concern the reliability of the financial statements and the accuracy of the general ledger.
_____ c)Whenever possible,the functions of authorization,recording and custody should be exercised by the same dependable employee.
_____ d)Cash is most susceptible to embezzlement at the points of receipt and disbursement.
_____ e)Even a well-designed internal control system cannot prevent collusion by employees.

Accepted Answer

a)True b)F

Question 10

The following information pertains to the bank reconciliation of January 31,2016 for the Greis Company:
In addition,the reconciliation revealed one error: Check #2146 for $152,written to pay utilities expense,was incorrectly recorded in the books for $125.
Required: Using the above information,compute the unadjusted book balance for cash.

Accepted Answer

$16,787*
$18,900 unadjusted bank balance

Question 11

In a bank reconciliation,a customer's NSF check included with the bank statement is:

Accepted Answer

A) deducted from the company's cash balance to get the true cash balance. 
B) added to the bank's cash balance to get the true cash balance. 
C) deducted from the bank's cash balance to get the true cash balance. 
D) added to the company's cash balance to get the true cash balance. 
A) deducted from the company's cash balance to get the true cash balance. 
B) added to the bank's cash balance to get the true cash balance. 
C) deducted from the bank's cash balance to get the true cash balance. 
D) added to the company's cash balance to get the true cash balance.

Question 12

For internal control purposes,what is meant by "separation of duties?"

Accepted Answer

The functions of authorization

Question 13

Which of the following is not a generally recognized internal control procedure?

Accepted Answer

A) Establishment of clear lines of authority. 
B) Having employees covered by a fidelity bond. 
C) Requiring regular vacations for certain employees. 
D) Customer service comment cards. 
A) Establishment of clear lines of authority. 
B) Having employees covered by a fidelity bond. 
C) Requiring regular vacations for certain employees. 
D) Customer service comment cards.

Question 14

Which of the following is not a typical form associated with a bank checking account?

Accepted Answer

A) Signature card 
B) Bank statement 
C) Debit memo 
D) Deposit ticket 
A) Signature card 
B) Bank statement 
C) Debit memo 
D) Deposit ticket

Question 15

Indicate whether each of the following items regarding petty cash is true or false.
_____ a)The establishment of a petty cash fund is an asset use transaction.
_____ b)The replenishment of a petty cash fund is an asset source transaction.
_____ c)At any time,the total of the petty cash vouchers plus the remaining coins and currency should equal the balance of the Petty Cash ledger account.
_____ d)If a shortage occurs,a credit is entered to the Cash Short and Over account.
_____ e)There is no journal entry made in the accounting records at the time when petty cash funds are disbursed.

Accepted Answer

a)False b)

Question 16

A savings account or certificate of deposit that imposes a substantial penalty for early withdrawals should not be classified as Cash on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not one of the purposes of an internal control system?

Accepted Answer

A) Safeguarding the company's assets. 
B) The evaluation of performance. 
C) The assessment of the degree of compliance with company policies and public laws. 
D) Ensuring that the company is using the most effective marketing plan. 
A) Safeguarding the company's assets. 
B) The evaluation of performance. 
C) The assessment of the degree of compliance with company policies and public laws. 
D) Ensuring that the company is using the most effective marketing plan.

Question 18

List five internal control procedures that should be followed to safeguard cash and reduce the likelihood of theft.

Accepted Answer

Any five of the following:
1)Separation

Question 19

Effective internal controls for cash include

Accepted Answer

A) disbursements made by prenumbered check. 
B) cash deposited in the bank on a timely basis. 
C) written cash receipts given to customers as evidence of payment. 
D) all of these answer choices are correct. 
A) disbursements made by prenumbered check. 
B) cash deposited in the bank on a timely basis. 
C) written cash receipts given to customers as evidence of payment. 
D) all of these answer choices are correct.

Question 20

What are the three types of audit opinion,and what is the meaning of each? Which type of opinion is considered the best?

Accepted Answer

The first type is an unqualified opinion

What account is used to record the amount of cash shortages or overages relative to a petty cash system?

List three of the five primary roles of the independent auditor (CPA).

Which of the following statements accurately describes a fidelity bond?

At March 31,Cummins Co.had a balance in its cash account of $10,400.At the end of March the company determined that it had outstanding checks of $900,deposits in transit of $600,a bank service charge of $20,and an NSF check from a customer for $200.The true cash balance at March 31 is:

In a bank reconciliation,a customer's NSF check included with the bank statement is:

For internal control purposes,what is meant by "separation of duties?"

Which of the following is not a generally recognized internal control procedure?

Which of the following is not a typical form associated with a bank checking account?

A savings account or certificate of deposit that imposes a substantial penalty for early withdrawals should not be classified as Cash on the balance sheet.

Which of the following is not one of the purposes of an internal control system?

List five internal control procedures that should be followed to safeguard cash and reduce the likelihood of theft.

Effective internal controls for cash include

What are the three types of audit opinion,and what is the meaning of each? Which type of opinion is considered the best?

An Introduction to Accounting

Understanding the Accounting Cycle

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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Exam 6: Internal Control and Accounting for Cash

What account is used to record the amount of cash shortages or overages relative to a petty cash system?

List three of the five primary roles of the independent auditor (CPA).

Which of the following statements accurately describes a fidelity bond?

At March 31,Cummins Co.had a balance in its cash account of $10,400.At the end of March the company determined that it had outstanding checks of $900,deposits in transit of $600,a bank service charge of $20,and an NSF check from a customer for $200.The true cash balance at March 31 is:

In a bank reconciliation,a customer's NSF check included with the bank statement is:

For internal control purposes,what is meant by "separation of duties?"

Which of the following is not a generally recognized internal control procedure?

Which of the following is not a typical form associated with a bank checking account?

A savings account or certificate of deposit that imposes a substantial penalty for early withdrawals should not be classified as Cash on the balance sheet.

Which of the following is not one of the purposes of an internal control system?

List five internal control procedures that should be followed to safeguard cash and reduce the likelihood of theft.

Effective internal controls for cash include

What are the three types of audit opinion,and what is the meaning of each? Which type of opinion is considered the best?

An Introduction to Accounting

Understanding the Accounting Cycle

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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