Question 1

The bank recorded a $3,000 deposit as $300.How would this information be included on the bank reconciliation?

Accepted Answer

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

Question 2

A petty cash fund was established with a $299 balance.It currently has cash of $76 and petty cash tickets totaling $222 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 3

In a good internal control system,which of the following sets of documents is required for proper approval of a payment to a supplier?

Accepted Answer

A) a journal entry,a supplier invoice,and a description of the goods being purchased 
B) a receiving report,an invoice,and a purchase order 
C) a purchase order,a journal entry,and a price catalog 
D) a supplier invoice,a bill of lading,and the supplier's financial statements 
A) a journal entry,a supplier invoice,and a description of the goods being purchased 
B) a receiving report,an invoice,and a purchase order 
C) a purchase order,a journal entry,and a price catalog 
D) a supplier invoice,a bill of lading,and the supplier's financial statements

Question 4

The bookkeeper of Fire Steel Inc.recorded a $1,524 check as $15,240 in payment of the current month's rent.Which of the following journal entries is needed to adjust for this error in the books of the company?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 5

Which of the following is an attribute of the internal control procedure "assignment of responsibilities"?

Accepted Answer

A) To validate their accounting records,a company should have an audit by an external accountant. 
B) The company should separate the custody of assets from accounting. 
C) The external auditors will monitor internal controls. 
D) Have clearly assigned responsibilities for each position. 
A) To validate their accounting records,a company should have an audit by an external accountant. 
B) The company should separate the custody of assets from accounting. 
C) The external auditors will monitor internal controls. 
D) Have clearly assigned responsibilities for each position.

Question 6

The bank statement reveals an EFT received from a customer 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 7

As a part of the internal control over cash receipts by mail,the mailroom sends both the customer checks and the remittance advices to the accounting department.

Accepted Answer

A) True 
 B)False

Question 8

The following information is needed to reconcile the cash balance for Fire Steel Inc.   
-What was the adjusted bank balance?

Accepted Answer

A) $18,720 
B) $18,700 
C) $18,820 
D) $18,060 
A) $18,720 
B) $18,700 
C) $18,820 
D) $18,060

Question 9

Which of the following is used by companies to separate cash duties and establish stronger control over cash receipts?

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 10

Having a cash ratio below 1 is a good thing.

Accepted Answer

A) True 
 B)False

Question 11

Separation of duties is a part of the definition of internal control.

Accepted Answer

A) True 
 B)False

Question 12

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

Accepted Answer

A) True 
 B)False

Question 13

Refer to the following bank reconciliation.
   Journalize the adjusting entry for the fourth reconciling item: Bank service charge.

Accepted Answer

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

Question 14

If the bank reconciliation includes a bank service charge,a journal entry is required,which debits Bank Expense and credits Cash.

Accepted Answer

A) True 
 B)False

Question 15

Journal entries are required if the bank reconciliation includes a book error.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an objective of internal control?

Accepted Answer

A) to encourage employees to follow company policies 
B) to ensure timely payment of Accounts Payables 
C) to ensure timely collection of Accounts Receivable 
D) to guarantee that a business makes a profit 
A) to encourage employees to follow company policies 
B) to ensure timely payment of Accounts Payables 
C) to ensure timely collection of Accounts Receivable 
D) to guarantee that a business makes a profit

Question 17

Cadmia Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not. In the above situation,which internal control procedure needs strengthening?

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 18

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 19

Cash in the bank is more liquid than a petty cash fund.

Accepted Answer

A) True 
 B)False

Question 20

A sequentially numbered document authorizing a cash payment is known as a ________.

Accepted Answer

A) cash register 
B) voucher 
C) voucher register 
D) ledger folio 
A) cash register 
B) voucher 
C) voucher register 
D) ledger folio

Exam 7: Internal Control and Cash

The bank recorded a $3,000 deposit as $300.How would this information be included on the bank reconciliation?

A petty cash fund was established with a $299 balance.It currently has cash of $76 and petty cash tickets totaling $222 for travel expense.Provide the journal entry to record the replenishment of the fund.

In a good internal control system,which of the following sets of documents is required for proper approval of a payment to a supplier?

The bookkeeper of Fire Steel Inc.recorded a $1,524 check as $15,240 in payment of the current month's rent.Which of the following journal entries is needed to adjust for this error in the books of the company?

Which of the following is an attribute of the internal control procedure "assignment of responsibilities"?

The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger.How would this information be included on the bank reconciliation?

As a part of the internal control over cash receipts by mail,the mailroom sends both the customer checks and the remittance advices to the accounting department.

The following information is needed to reconcile the cash balance for Fire Steel Inc. -What was the adjusted bank balance?

Which of the following is used by companies to separate cash duties and establish stronger control over cash receipts?

Having a cash ratio below 1 is a good thing.

Separation of duties is a part of the definition of internal control.

A key to strong control over petty cash is to ensure that several persons serve as custodian at one time.

Refer to the following bank reconciliation. Journalize the adjusting entry for the fourth reconciling item: Bank service charge.

If the bank reconciliation includes a bank service charge,a journal entry is required,which debits Bank Expense and credits Cash.

Journal entries are required if the bank reconciliation includes a book error.

Which of the following is an objective of internal control?

Cadmia Services hired a new accounting manager.He signed a contract for a new accounting information system,but his position did not specify whether he was authorized to do so or not. In the above situation,which internal control procedure needs strengthening?

A company check for payment must be signed by ________.

Cash in the bank is more liquid than a petty cash fund.

A sequentially numbered document authorizing a cash payment is known as a ________.

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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