Question 1

Which of the following is NOT a significant feature of a system of internal control over cash?

Accepted Answer

A)  More than one person opens mail. 
B)  The person who does bank reconciliations should not be the cashier. 
C)  The staff member responsible for approving invoices for payment should sign cheques. 
D)  Bank reconciliation statements are prepared at regular intervals. 
A)  More than one person opens mail. 
B)  The person who does bank reconciliations should not be the cashier. 
C)  The staff member responsible for approving invoices for payment should sign cheques. 
D)  Bank reconciliation statements are prepared at regular intervals.

Question 2

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Accepted Answer

A)  bank statement 
B)  bank reconciliation statement 
C)  bank control account 
D)  cash flow statement. 
A)  bank statement 
B)  bank reconciliation statement 
C)  bank control account 
D)  cash flow statement.

Question 3

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records.

Question 4

Which of the following is NOT a feature of the internal control of cash payments?

Accepted Answer

A)  Two staff members should sign the cheques. 
B)  The signatories should be involved in invoice approval. 
C)  Payments should only be made for properly authorised documentation. 
D)  Cheques should be endorsed with a stamp. 
A)  Two staff members should sign the cheques. 
B)  The signatories should be involved in invoice approval. 
C)  Payments should only be made for properly authorised documentation. 
D)  Cheques should be endorsed with a stamp.

Question 5

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a customer's cheque for $85 that was returned because of insufficient funds is to:

Accepted Answer

A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records.

Question 6

Which of the following is NOT a common feature of a petty cash system?

Accepted Answer

A)  Cash in the fund plus vouchers held equals the amount advanced to the petty cashier. 
B)  When the fund is replenished,the expenses account is debited. 
C)  When the fund is replenished,the cash account is credited. 
D)  When the fund is replenished,petty cash is credited. 
A)  Cash in the fund plus vouchers held equals the amount advanced to the petty cashier. 
B)  When the fund is replenished,the expenses account is debited. 
C)  When the fund is replenished,the cash account is credited. 
D)  When the fund is replenished,petty cash is credited.

Question 7

Accompanying the bank statement was a debit memorandum for bank service charges.What entry is required in the company's accounts?

Accepted Answer

A)  DR Bank charges$\quad$$\quad$$\quad$$\quad$ CR Cash 
B)  DR Cash$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ CR Other revenue 
C)  DR Cash$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ CR Accounts payable 
D)  DR Accounts payable$\quad$$\quad$$\quad$CR Cash 
A)  DR Bank charges$\quad$$\quad$$\quad$$\quad$ CR Cash 
B)  DR Cash$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ CR Other revenue 
C)  DR Cash$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ CR Accounts payable 
D)  DR Accounts payable$\quad$$\quad$$\quad$CR Cash

Question 8

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Accepted Answer

A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records.

Question 9

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for dividend on shares,$1200,deposited directly into the bank account,appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records.

Question 10

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for cheques unpresented at end of month,$4900,is to:

Accepted Answer

A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement 
B)  deduct it from the balance as per bank statement 
C)  add it to the balance per company records 
D)  deduct it from the balance per company records.

Question 11

Segregation of duties involves:

Accepted Answer

A)  ensuring that only qualified accountants are employed in the accounting department 
B)  separation of record-keeping from handling of assets 
C)  providing each staff member with an individual password 
D)  separating the tasks of employees. 
A)  ensuring that only qualified accountants are employed in the accounting department 
B)  separation of record-keeping from handling of assets 
C)  providing each staff member with an individual password 
D)  separating the tasks of employees.

Question 12

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Accepted Answer

A)  discourages inefficient use of resources 
B)  helps management safeguard assets 
C)  assists management in controlling the enterprise 
D)  prevents collusion between employees. 
A)  discourages inefficient use of resources 
B)  helps management safeguard assets 
C)  assists management in controlling the enterprise 
D)  prevents collusion between employees.

Which of the following is NOT a significant feature of a system of internal control over cash?

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Which of the following is NOT a feature of the internal control of cash payments?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a customer's cheque for $85 that was returned because of insufficient funds is to:

Which of the following is NOT a common feature of a petty cash system?

Accompanying the bank statement was a debit memorandum for bank service charges.What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for dividend on shares,$1200,deposited directly into the bank account,appearing on the bank statement is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for cheques unpresented at end of month,$4900,is to:

Segregation of duties involves:

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Sustainability Reporting

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Appendix: Special Journals, subsidiary Ledgers and Control Accounts

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Exam 8: Internal Control and Cash

Which of the following is NOT a significant feature of a system of internal control over cash?

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Which of the following is NOT a feature of the internal control of cash payments?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a customer's cheque for $85 that was returned because of insufficient funds is to:

Which of the following is NOT a common feature of a petty cash system?

Accompanying the bank statement was a debit memorandum for bank service charges.What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for dividend on shares,$1200,deposited directly into the bank account,appearing on the bank statement is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for cheques unpresented at end of month,$4900,is to:

Segregation of duties involves:

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Sustainability Reporting

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Appendix: Special Journals, subsidiary Ledgers and Control Accounts

Filters