Question 1

The impact of technology on internal controls includes which of the following?

Accepted Answer

A) Reduced processing errors. 
B) Elimination of the need for regular audits. 
C) Elimination of the need to bond employees. 
D) More efficient separation of duties. 
E) Elimination of fraud. 
A) Reduced processing errors. 
B) Elimination of the need for regular audits. 
C) Elimination of the need to bond employees. 
D) More efficient separation of duties. 
E) Elimination of fraud.

Question 2

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 3

For which item does a bank NOT issue a debit memorandum?

Accepted Answer

A) To notify a depositor of all withdrawals through an ATM. 
B) To notify a depositor of a deduction to a depositor's account. 
C) To notify a depositor of a bounced check. 
D) To notify a depositor of periodic payments arranged in advance,by a depositor. 
E) To notify a depositor of a deposit to their account. 
A) To notify a depositor of all withdrawals through an ATM. 
B) To notify a depositor of a deduction to a depositor's account. 
C) To notify a depositor of a bounced check. 
D) To notify a depositor of periodic payments arranged in advance,by a depositor. 
E) To notify a depositor of a deposit to their account.

Question 4

The main principles of internal control include which of the following:

Accepted Answer

A) Establish responsibilities. 
B) Maintain minimal records. 
C) Use only computerized systems. 
D) Bond all employees. 
E) Require automated sales systems. 
A) Establish responsibilities. 
B) Maintain minimal records. 
C) Use only computerized systems. 
D) Bond all employees. 
E) Require automated sales systems.

Question 5

Discuss the purpose of a bank reconciliation.

Accepted Answer

A bank reconciliation is a report explai

Question 6

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

Accepted Answer

A) True 
 B)False

Question 7

A company wrote a check on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

Accepted Answer

A) Deduct the check from the bank statement balance. 
B) Send the bank a credit memorandum. 
C) Deduct the check from the September 30 book balance and add it to the October 1 book balance. 
D) Add the check to the book balance of cash. 
E) Add the check to the bank statement balance. 
A) Deduct the check from the bank statement balance. 
B) Send the bank a credit memorandum. 
C) Deduct the check from the September 30 book balance and add it to the October 1 book balance. 
D) Add the check to the book balance of cash. 
E) Add the check to the bank statement balance.

Question 8

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

Accepted Answer

A) True 
 B)False

Question 9

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Accepted Answer

A) Vendor. 
B) Payee. 
C) Vendee. 
D) Creditor. 
E) Debtor. 
A) Vendor. 
B) Payee. 
C) Vendee. 
D) Creditor. 
E) Debtor.

Question 10

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Accepted Answer

A) True 
 B)False

Question 11

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Accepted Answer

A) After the mail is opened,a list (in triplicate) of the money received is prepared with a record of the sender's name,the amount,and an explanation of why the money is sent. 
B) The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C) For safety,only one person should open the mail and that person should immediately deposit the cash received in the bank. 
D) The cashier should not also be the record keeper who records the amounts received in the accounting records. 
E) All of the above are good internal control procedures over cash receipts that arrive through the mail. 
A) After the mail is opened,a list (in triplicate) of the money received is prepared with a record of the sender's name,the amount,and an explanation of why the money is sent. 
B) The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. 
C) For safety,only one person should open the mail and that person should immediately deposit the cash received in the bank. 
D) The cashier should not also be the record keeper who records the amounts received in the accounting records. 
E) All of the above are good internal control procedures over cash receipts that arrive through the mail.

Question 13

Discuss how the principles of internal control apply to cash receipts.

Accepted Answer

Internal control principles as applied t

Question 14

Cash equivalents:

Accepted Answer

A) Are short-term,highly liquid investments. 
B) Include six-month CDs. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders. 
A) Are short-term,highly liquid investments. 
B) Include six-month CDs. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders.

Question 15

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 16

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Accepted Answer

A) Cash Lost account. 
B) Bank Reconciliation account. 
C) Petty Cash account. 
D) Cash Over and Short account. 
E) Cash Receivable account. 
A) Cash Lost account. 
B) Bank Reconciliation account. 
C) Petty Cash account. 
D) Cash Over and Short account. 
E) Cash Receivable account.

Question 17

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Accepted Answer

The answer of The document the purchasing department sends to...

Question 18

Highlight Hotel deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on December 31, its Cash account shows a $18,393, debit balance. Highlight Hotel's June 30 bank statement shows $15,921 on deposit in the bank. Prepare a bank reconciliation for Highlight Hotel using the following information:
1.Outstanding checks as of December 31 total $2,261.
2.The December 31 bank statement included a $35 debit memorandum for bank services.
3.Check No. 2519, listed with the canceled checks, was correctly drawn for $850 in payment of a utility bill on December 16. Highlight Hotel mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $805.
4.The December 31 cash receipts of $3,425 were placed in the bank’s night depository after banking hours and did not appear on the December 31 bank statement.
5.The bank statement included a check from a customer’s payment of an account receivable that had been returned NSF in the amount of $1,228.
Prepare the bank reconciliation for December 31.

Accepted Answer

The answer of Highlight Hotel deposits all cash receipts on...

Question 19

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

A) True 
 B)False

Question 20

The number of days' sales uncollected is calculated by:

Accepted Answer

A) Dividing accounts receivable by net sales. 
B) Dividing accounts receivable by net sales and then multiplying by 365. 
C) Dividing net sales by accounts receivable. 
D) Dividing net sales by accounts receivable and then multiplying by 365. 
E) Multiplying net sales by accounts receivable and dividing the result by 365. 
A) Dividing accounts receivable by net sales. 
B) Dividing accounts receivable by net sales and then multiplying by 365. 
C) Dividing net sales by accounts receivable. 
D) Dividing net sales by accounts receivable and then multiplying by 365. 
E) Multiplying net sales by accounts receivable and dividing the result by 365.

The impact of technology on internal controls includes which of the following?

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

For which item does a bank NOT issue a debit memorandum?

The main principles of internal control include which of the following:

Discuss the purpose of a bank reconciliation.

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

A company wrote a check on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Discuss how the principles of internal control apply to cash receipts.

Cash equivalents:

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

The number of days' sales uncollected is calculated by:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 6: Reporting and Analyzing Cash and Internal Controls

The impact of technology on internal controls includes which of the following?

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

For which item does a bank NOT issue a debit memorandum?

The main principles of internal control include which of the following:

Discuss the purpose of a bank reconciliation.

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

A company wrote a check on September 30 that did not appear on the bank statement dated September 30.In preparing the September 30 bank reconciliation,the company should:

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Discuss how the principles of internal control apply to cash receipts.

Cash equivalents:

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

The number of days' sales uncollected is calculated by:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters