Question 1

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 2

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 3

The following information is available for Jade Company for the month ending June 30,2014.
   Prepare bank reconciliation for Jade Company for June 30,2014.

Accepted Answer

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

Question 4

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 5

Which of the following is true of internal control?

Accepted Answer

A) A company's outside auditor is responsible for the company's internal control system. 
B) One of the major purposes of internal control is to ensure that the assets are safeguarded. 
C) Internal control procedures tend to diminish the importance of operational efficiency. 
D) Internal controls are mainly used to ensure timely payment of liabilities. 
A) A company's outside auditor is responsible for the company's internal control system. 
B) One of the major purposes of internal control is to ensure that the assets are safeguarded. 
C) Internal control procedures tend to diminish the importance of operational efficiency. 
D) Internal controls are mainly used to ensure timely payment of liabilities.

Question 6

In a bank reconciliation,a book error will be shown on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 7

Sarbanes-Oxley Act requires all the private companies in the U.S.to maintain an internal control system.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would be included in the journal to record an NSF check?

Accepted Answer

A) a debit to Accounts Payable and a credit to Cash 
B) a debit to Accounts Receivable and a credit to Cash 
C) a debit to Cash and a credit to Accounts Receivable 
D) a debit to Bank Expense and a credit to Cash 
A) a debit to Accounts Payable and a credit to Cash 
B) a debit to Accounts Receivable and a credit to Cash 
C) a debit to Cash and a credit to Accounts Receivable 
D) a debit to Bank Expense and a credit to Cash

Question 9

Which of the following statements describes an invoice from a supplier?

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

A petty cash fund was established with a $250 balance.It currently has cash of $38 and petty cash tickets totaling $212 for travel expense.Provide the journal entry to record the replenishment of the fund.

Accepted Answer

The answer of A petty cash fund was established with...

Question 11

When calculating the cash ratio,the numerator includes cash equivalents.

Accepted Answer

A) True 
 B)False

Question 12

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as ________.

Accepted Answer

A) Real Time Gross Settlement 
B) Electronic Data Interchange 
C) Electronic Fund Transfer 
D) Evaluated Receipts Settlement 
A) Real Time Gross Settlement 
B) Electronic Data Interchange 
C) Electronic Fund Transfer 
D) Evaluated Receipts Settlement

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

Regarding controls over cash receipts by mail,the bank deposit slip should be compared to the remittance advices by the accounting department.

Accepted Answer

A) True 
 B)False

Question 15

A check for which a maker's bank account has inadequate money to pay the check is known as ________.

Accepted Answer

A) nonsufficient funds checks 
B) outstanding checks 
C) restrictive checks 
D) canceled checks 
A) nonsufficient funds checks 
B) outstanding checks 
C) restrictive checks 
D) canceled checks

Question 16

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

Accepted Answer

A) outstanding checks and correction of book error 
B) deposit in transit and NSF check 
C) deposit in transit and outstanding checks 
D) bank service charge and correction of book error 
A) outstanding checks and correction of book error 
B) deposit in transit and NSF check 
C) deposit in transit and outstanding checks 
D) bank service charge and correction of book error

Question 17

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 18

Which of the following is a key element of good internal control?

Accepted Answer

A) having the latest version of information systems installed 
B) having audits at periodic intervals 
C) having a good working environment for employees 
D) allowing no vacations and job rotations 
A) having the latest version of information systems installed 
B) having audits at periodic intervals 
C) having a good working environment for employees 
D) allowing no vacations and job rotations

Question 19

External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles.

Accepted Answer

A) True 
 B)False

Question 20

Which one of the following is true of a signature card?

Accepted Answer

A) It shows each authorized person's signature for a bank account. 
B) It is the same as a deposit receipt and acts as a proof of the deposit transaction. 
C) It must be signed by a banking authority for a checking account at a bank. 
D) It can only be used for bank accounts of individuals not for the bank accounts of businesses. 
A) It shows each authorized person's signature for a bank account. 
B) It is the same as a deposit receipt and acts as a proof of the deposit transaction. 
C) It must be signed by a banking authority for a checking account at a bank. 
D) It can only be used for bank accounts of individuals not for the bank accounts of businesses.

Exam 7: Internal Control and Cash

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

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?

The following information is available for Jade Company for the month ending June 30,2014. Prepare bank reconciliation for Jade Company for June 30,2014.

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

Which of the following is true of internal control?

In a bank reconciliation,a book error will be shown on the bank side of the reconciliation.

Sarbanes-Oxley Act requires all the private companies in the U.S.to maintain an internal control system.

Which of the following would be included in the journal to record an NSF check?

Which of the following statements describes an invoice from a supplier?

A petty cash fund was established with a $250 balance.It currently has cash of $38 and petty cash tickets totaling $212 for travel expense.Provide the journal entry to record the replenishment of the fund.

When calculating the cash ratio,the numerator includes cash equivalents.

A streamlined process that bypasses paper documents altogether and in which computers of retailers communicate directly with the computers of suppliers to automate routine business transactions is known as ________.

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

Regarding controls over cash receipts by mail,the bank deposit slip should be compared to the remittance advices by the accounting department.

A check for which a maker's bank account has inadequate money to pay the check is known as ________.

Which of the following items are reconciling items on the bank side of the 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 key element of good internal control?

External auditors evaluate company controls to ensure the financial statements are presented fairly in accordance with Generally Accepted Accounting Principles.

Which one of the following is true of a signature card?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Receivables

Plant Assets, natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems

Cost-Volume-Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Accounting Information Systems

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