Question 1

Refer to the following bank reconciliation:   Journalize the adjusting entry for the first reconciling item: note collected by bank.

Accepted Answer

The answer of Refer to the following bank reconciliation: ...

Question 2

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

Accepted Answer

A) the criticality of information system 
B) the need of training and supervision of employees 
C) monitoring of internal controls by external auditors 
D) purchase of burglar alarms. 
A) the criticality of information system 
B) the need of training and supervision of employees 
C) monitoring of internal controls by external auditors 
D) purchase of burglar alarms.

Question 3

The following information is available for Jade Company for the month ending June 30, 2014.
• Balance as per the bank statement is $11,240.
• Balance as per books is $10,200.
• Check #506 for $1,200 and check #510 for $900 were not shown on the June 30, bank statement.
• A deposit in transit of $3,110 had not been received by the bank when the bank statement was generated.
• A bank debit memo indicated an NSF check for $85 written by Jane Smith to Jade Company on June 13.
• A bank credit memo indicated a note collected by the bank of $2,100 and interest revenue of $55 on June 20.
• The bank statement indicated service charges of $20.
Prepare bank reconciliation for Jade Company for June 30, 2014.

Accepted Answer

The answer of The following information is available for Jade...

Question 4

A petty cash fund was established with a $350 balance. It currently has cash of $41 and petty cash tickets totaling $309. Which of the following would be included in the entry to replenish the fund?

Accepted Answer

A) a credit to Petty Cash for $309 
B) a debit to Petty Cash for $41 
C) a credit to Cash for $41 
D) debits to various expenses for $309 
A) a credit to Petty Cash for $309 
B) a debit to Petty Cash for $41 
C) a credit to Cash for $41 
D) debits to various expenses for $309

Question 5

Two or more people working together to circumvent internal controls and defraud a company is known as:

Accepted Answer

A) encryption. 
B) firewalls. 
C) collusion. 
D) separation of duties. 
A) encryption. 
B) firewalls. 
C) collusion. 
D) separation of duties.

Question 6

Which of the following statements describes a voucher?

Accepted Answer

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

Question 7

Which of the following is a problem that must be addressed in the internal controls for e-commerce?

Accepted Answer

A) encryption 
B) firewall 
C) phishing expeditions 
D) separation of duties 
A) encryption 
B) firewall 
C) phishing expeditions 
D) separation of duties

Question 8

The cash balance in a company's general ledger and the bank's balance on the bank statement will always be the same.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements describes a purchase order?

Accepted Answer

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

Question 10

Which of the following statements about internal control is true?

Accepted Answer

A) Internal auditors ensure that the employees follow company policies. 
B) The treasurer and controller have the same responsibilities. 
C) External auditors are employees of the company. 
D) The control procedures are known as the "tone at the top." 
A) Internal auditors ensure that the employees follow company policies. 
B) The treasurer and controller have the same responsibilities. 
C) External auditors are employees of the company. 
D) The control procedures are known as the "tone at the top."

Question 11

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation?

Accepted Answer

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

Question 12

Which of the following is described as a system where customers send their checks directly to a post office box that belongs to a bank?

Accepted Answer

A) an encryption system 
B) an imprest system 
C) a lock-box system 
D) a firewall system 
A) an encryption system 
B) an imprest system 
C) a lock-box system 
D) a firewall system

Question 13

Which of the following is a benefit of online banking to a business?

Accepted Answer

A) The business can reconcile to the bank's balance at any time. 
B) The bank reconciliation is not necessary. 
C) The business can reduce their internal controls over cash receipts. 
D) A company's book balance will always equal the bank's balance. 
A) The business can reconcile to the bank's balance at any time. 
B) The bank reconciliation is not necessary. 
C) The business can reduce their internal controls over cash receipts. 
D) A company's book balance will always equal the bank's balance.

Question 14

Which of the following is the last step in the daily control over cash receipts by mail?

Accepted Answer

A) A mailroom employee sends all customer checks to the treasurer who has the cashier make the bank deposit. 
B) The controller opens the mail and sends the remittance advices to the accounting department. 
C) The controller compares the records of the day's bank deposit amount from the treasurer and the debit to cash from the accounting department. 
D) The accounting department prepares journal entries to cash and the customers' accounts. 
A) A mailroom employee sends all customer checks to the treasurer who has the cashier make the bank deposit. 
B) The controller opens the mail and sends the remittance advices to the accounting department. 
C) The controller compares the records of the day's bank deposit amount from the treasurer and the debit to cash from the accounting department. 
D) The accounting department prepares journal entries to cash and the customers' accounts.

Question 15

The Fingertips Company had the following financial data for the year ended December 31, 2015:   What is the cash ratio as of December 31, 2015, for Fingertips Company?

Accepted Answer

A) 0.30 
B) 0.40 
C) 0.53 
D) 0.83 
A) 0.30 
B) 0.40 
C) 0.53 
D) 0.83

Question 16

A company check for payment must be signed by:

Accepted Answer

A) any employee of the company. 
B) a bank employee. 
C) an employee specifically authorized by the company. 
D) the external auditor. 
A) any employee of the company. 
B) a bank employee. 
C) an employee specifically authorized by the company. 
D) the external auditor.

Question 17

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the Expense account.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the following bank reconciliation:   Journalize the adjusting entry for the third reconciling item: NSF check.

Accepted Answer

The answer of Refer to the following bank reconciliation: ...

Question 19

In the following situation, which internal control procedure needs strengthening? At Syria Services, the junior accountant collects checks and cash from customers and records the transactions into the journal. The controller approves the journal entries and bank reconciliations. The treasurer signs checks and approves contracts.

Accepted Answer

A) assignment of responsibilities 
B) competent, reliable, and ethical personnel 
C) separation of duties 
D) documents 
A) assignment of responsibilities 
B) competent, reliable, and ethical personnel 
C) separation of duties 
D) documents

Question 20

Which of the following describes the control environment?

Accepted Answer

A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The control environment is the "tone at the top" of the business. 
C) The control environment is designed to ensure that the business earns profit. 
D) A company must identify its risks. 
A) Internal auditors monitor company controls to safeguard assets, and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The control environment is the "tone at the top" of the business. 
C) The control environment is designed to ensure that the business earns profit. 
D) A company must identify its risks.

Exam 8: Internal Control and Cash

Refer to the following bank reconciliation: Journalize the adjusting entry for the first reconciling item: note collected by bank.

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

A petty cash fund was established with a $350 balance. It currently has cash of $41 and petty cash tickets totaling $309. Which of the following would be included in the entry to replenish the fund?

Two or more people working together to circumvent internal controls and defraud a company is known as:

Which of the following statements describes a voucher?

Which of the following is a problem that must be addressed in the internal controls for e-commerce?

The cash balance in a company's general ledger and the bank's balance on the bank statement will always be the same.

Which of the following statements describes a purchase order?

Which of the following statements about internal control is true?

The bank statement reveals an EFT payment made to one of the company's suppliers that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation?

Which of the following is described as a system where customers send their checks directly to a post office box that belongs to a bank?

Which of the following is a benefit of online banking to a business?

Which of the following is the last step in the daily control over cash receipts by mail?

The Fingertips Company had the following financial data for the year ended December 31, 2015: What is the cash ratio as of December 31, 2015, for Fingertips Company?

A company check for payment must be signed by:

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the Expense account.

Refer to the following bank reconciliation: Journalize the adjusting entry for the third reconciling item: NSF check.

Which of the following describes the control environment?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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