Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following items will not appear as deductions on a bank statement?

Accepted Answer

A) NSF 
B) EFT 
C) Service Charge 
D) Deposits 
A) NSF 
B) EFT 
C) Service Charge 
D) Deposits

Question 3

In reconciling a bank statement,the bank balance is $2,100,and the checkbook balance is $2,001.Which of the following is the most probable reason for the bank balance being larger than the book balance?

Accepted Answer

A) There are outstanding checks. 
B) The bank has deducted certain amounts for bank service charges. 
C) A deposit in transit was made at the end of the month. 
D) The company erroneously recorded a check for an amount less than the actual amount. 
A) There are outstanding checks. 
B) The bank has deducted certain amounts for bank service charges. 
C) A deposit in transit was made at the end of the month. 
D) The company erroneously recorded a check for an amount less than the actual amount.

Question 4

Which one of the following is true of the bank reconciliation?

Accepted Answer

A) It should not be prepared by an employee who handles cash transactions. 
B) It is prepared in place of the cash ledger. 
C) It is a financial statement. 
D) It guarantees that no errors have been made. 
A) It should not be prepared by an employee who handles cash transactions. 
B) It is prepared in place of the cash ledger. 
C) It is a financial statement. 
D) It guarantees that no errors have been made.

Question 5

The following information is needed to reconcile the cash balance for Jackson Lawn Services.
• A deposit of $5,800 is in transit.
• Outstanding checks total $1,500.
• The book balance is $6,800 at February 28,2017.
• The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28,2017 was $18,000.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,700 was returned for nonsufficient funds.
• The bank service charge is $60.
Based on this information,prepare a bank reconciliation for Jackson Lawn Services as of February 28,2017.

Accepted Answer

The answer of The following information is needed to reconcile...

Question 6

Jupiter Service Company decides to increase the amount of the petty cash fund from $500 to $600.A journal entry must be made to debit the Cash account and credit the Petty Cash account for $100.

Accepted Answer

A) True 
 B)False

Question 7

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 8

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 9

In a large company,the person who is responsible for comparing cash and the bank balance is the ________.

Accepted Answer

A) CEO 
B) CFO 
C) controller 
D) treasurer 
A) CEO 
B) CFO 
C) controller 
D) treasurer

Question 10

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 11

A check of $300,000,deposited by a company,was returned to the bank for nonsufficient funds.How would this information be included on the bank reconciliation?

Accepted Answer

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

Question 12

Bank errors are posting errors made by the bank that either incorrectly increase or decrease the bank balance.

Accepted Answer

A) True 
 B)False

Question 13

A signature card is a card that shows each authorized person's signature for a bank account.

Accepted Answer

A) True 
 B)False

Question 14

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 payable 
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 payable 
C) to ensure timely collection of accounts receivable 
D) to guarantee that a business makes a profit

Question 15

The data of Franklin Brothers Corp.for two years are given below. $$\begin{array} { | l | r | r | } 
\hline & 2016 & 2017 \
\hline \text { Cash and cash equivalents } & \$ 5,300 & \$ 12,300 \
\hline \text { Total current liabilities } & 24,000 & 35,000 \
\hline
\end{array}$$ Based on the above information,which of the following statements is true?

Accepted Answer

A) Cash ratio has increased from 0.02 in 2016 to 0.03 in 2017. 
B) Cash ratio has increased from 0.05 in 2016 to 0.08 in 2017. 
C) Cash ratio has increased from 0.351 in 2016 to 0.221 in 2017. 
D) Cash ratio has increased from0.221 in 2016 to 0.351 in 2017. 
A) Cash ratio has increased from 0.02 in 2016 to 0.03 in 2017. 
B) Cash ratio has increased from 0.05 in 2016 to 0.08 in 2017. 
C) Cash ratio has increased from 0.351 in 2016 to 0.221 in 2017. 
D) Cash ratio has increased from0.221 in 2016 to 0.351 in 2017.

Question 16

The petty cash fund had an initial imprest balance of $200.It currently has $17 in cash,$5 in miscellaneous cash receipts,and an additional $173 in specific cash receipts.The debit to Cash Short & Over would be ________.

Accepted Answer

A) $5 
B) $17 
C) $173 
D) $178 
A) $5 
B) $17 
C) $173 
D) $178

Question 17

The only time the Petty Cash account is used in a journal entry is when the account is established,increased,or decreased.

Accepted Answer

A) True 
 B)False

Question 18

When a check is issued,the party being paid the cash is referred to as the ________.

Accepted Answer

A) payee 
B) maker 
C) bank signatory 
D) depositor 
A) payee 
B) maker 
C) bank signatory 
D) depositor

Question 19

Debit card transactions are considered electronic funds transfer.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a benefit provided by internal control?

Accepted Answer

A) It ensures timely collection of accounts receivables. 
B) It ensures that collusion will never happen. 
C) It guarantees that a business makes profit. 
D) It promotes operational efficiency. 
A) It ensures timely collection of accounts receivables. 
B) It ensures that collusion will never happen. 
C) It guarantees that a business makes profit. 
D) It promotes operational efficiency.

Exam 7: Internal Control and Cash

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

Which of the following items will not appear as deductions on a bank statement?

In reconciling a bank statement,the bank balance is $2,100,and the checkbook balance is $2,001.Which of the following is the most probable reason for the bank balance being larger than the book balance?

Which one of the following is true of the bank reconciliation?

Jupiter Service Company decides to increase the amount of the petty cash fund from $500 to $600.A journal entry must be made to debit the Cash account and credit the Petty Cash account for $100.

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

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

In a large company,the person who is responsible for comparing cash and the bank balance is the ________.

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?

A check of $300,000,deposited by a company,was returned to the bank for nonsufficient funds.How would this information be included on the bank reconciliation?

Bank errors are posting errors made by the bank that either incorrectly increase or decrease the bank balance.

A signature card is a card that shows each authorized person's signature for a bank account.

Which of the following is an objective of internal control?

The data of Franklin Brothers Corp.for two years are given below. 2016 2017 Cash and cash equivalents \ 5,300 \ 12,300 Total current liabilities 24,000 35,000 Based on the above information,which of the following statements is true?

The petty cash fund had an initial imprest balance of $200.It currently has $17 in cash,$5 in miscellaneous cash receipts,and an additional $173 in specific cash receipts.The debit to Cash Short & Over would be ________.

The only time the Petty Cash account is used in a journal entry is when the account is established,increased,or decreased.

When a check is issued,the party being paid the cash is referred to as the ________.

Debit card transactions are considered electronic funds transfer.

Which of the following is a benefit provided by internal control?

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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