Question 1

Why is it a matter of good internal control to deposit all cash receipts daily and make all payments for goods and services by check?

Accepted Answer

A) When no paper documents are required there is increased convenience and lower cost 
B) These actions control the access to cash and create an independent record of all cash activities 
C) These procedures result in a more extensive testing of a company's records 
D) The Sarbanes-Oxley Act requires these steps be taken by each publicly traded company 
E) These procedures allow management to determine if projected cash receipts and disbursements came in over or under budgeted amounts 
A) When no paper documents are required there is increased convenience and lower cost 
B) These actions control the access to cash and create an independent record of all cash activities 
C) These procedures result in a more extensive testing of a company's records 
D) The Sarbanes-Oxley Act requires these steps be taken by each publicly traded company 
E) These procedures allow management to determine if projected cash receipts and disbursements came in over or under budgeted amounts

Question 2

At the end of the day,the cash register's record shows $1,000 but the count of cash in the register is $1,035.The proper entry to record this excess includes a:

Accepted Answer

A) Credit to Cash for $35 
B) Debit to Cash for $35 
C) Credit to Cash Over and Short for $35 
D) Debit to Cash Over and Short for $35 
E) Debit to Petty Cash for $35 
A) Credit to Cash for $35 
B) Debit to Cash for $35 
C) Credit to Cash Over and Short for $35 
D) Debit to Cash Over and Short for $35 
E) Debit to Petty Cash for $35

Question 3

On a bank statement,deposits are shown as __________________,because the depositor's account is a liability on the bank's records.

Accepted Answer

The answer of On a bank statement,deposits are shown as...

Question 4

A good system of internal control:

Accepted Answer

A) Urges adherence to prescribed managerial policies 
B) Insures profitable operations 
C) Eliminates the need for an audit 
D) Requires the use of non-computerized systems 
E) Is not necessary if the company uses a computerized system 
A) Urges adherence to prescribed managerial policies 
B) Insures profitable operations 
C) Eliminates the need for an audit 
D) Requires the use of non-computerized systems 
E) Is not necessary if the company uses a computerized system

Question 5

List the main principles of internal controls.

Accepted Answer

Principles of internal controls include

Question 6

The days' sales uncollected ratio is used to:

Accepted Answer

A) Measure how many days of sales remain until the end of the year 
B) Determine the number of days that have passed without collecting on accounts receivable 
C) Identify the likelihood of collecting sales on account 
D) Estimate how much time is likely to pass before the amount of accounts receivable is collected 
E) Measure the amount of layaway sales for a period 
A) Measure how many days of sales remain until the end of the year 
B) Determine the number of days that have passed without collecting on accounts receivable 
C) Identify the likelihood of collecting sales on account 
D) Estimate how much time is likely to pass before the amount of accounts receivable is collected 
E) Measure the amount of layaway sales for a period

Question 7

A check:

Accepted Answer

A) Involves the writer,the signers,the cashier and the bank 
B) Involves the maker,the payee and the bank 
C) Involves the maker and the payee 
D) Involves the bookkeeper,the payee and the bank 
E) Involves the signer,the cashier and the company 
A) Involves the writer,the signers,the cashier and the bank 
B) Involves the maker,the payee and the bank 
C) Involves the maker and the payee 
D) Involves the bookkeeper,the payee and the bank 
E) Involves the signer,the cashier and the company

Question 8

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

Accepted Answer

A) True 
 B)False

Question 9

A voucher is an internal file that:

Accepted Answer

A) Is prepared after an invoice is received 
B) Is used as a substitute for an invoice 
C) Is used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded 
D) Takes the place of a bank check 
E) Is prepared before the company orders goods 
A) Is prepared after an invoice is received 
B) Is used as a substitute for an invoice 
C) Is used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded 
D) Takes the place of a bank check 
E) Is prepared before the company orders goods

Question 10

What are some of the risks for a company converting from GAAP to IFRS?

Accepted Answer

A) Misstatement of financial information 
B) Fraud 
C) Ineffective communication of the impact of the change to investors and creditors 
D) Management's inability to certify the effectiveness of controls over financial reporting 
E) All of the items listed above are risks that a company converting from GAAP to IFRS must
Be aware of 
A) Misstatement of financial information 
B) Fraud 
C) Ineffective communication of the impact of the change to investors and creditors 
D) Management's inability to certify the effectiveness of controls over financial reporting 
E) All of the items listed above are risks that a company converting from GAAP to IFRS must
Be aware of

Question 11

A good voucher system includes a set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

Accepted Answer

A) True 
 B)False

Question 12

On a bank statement,deposits are listed as debits because the bank increases its cash account when the deposit is made.

Accepted Answer

A) True 
 B)False

Question 13

Liquidity refers to a company's ability to pay its short-term obligations.

Accepted Answer

A) True 
 B)False

Question 14

An invoice is a document that is used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

Accepted Answer

A) True 
 B)False

Question 15

A __________________________ is a document explaining the payment of a check.

Accepted Answer

The answer of A __________________________ is a document explaining the...

Question 16

The internal document that is prepared by a department manager to inform the purchasing department of its needs is called the ________________________.

Accepted Answer

Purchase r

Question 17

An effective voucher system has limited ability in preventing a dishonest employee from colluding with a dishonest supplier to fraudulently acquire cash payments for goods and services not received.

Accepted Answer

A) True 
 B)False

Question 18

Maintaining adequate business records is an important internal control principle.

Accepted Answer

A) True 
 B)False

Question 19

A check involves 3 parties: the maker who signs the check,the payee who is the recipient and the bank on which the check is drawn.

Accepted Answer

A) True 
 B)False

Question 20

Given the following information:
Petty cash balance: $450.00 Courier receipt: $82.50
Postage receipt: $ 48.00 Office Supplies receipt: $56.22
Business Meal receipt: $102.34 Cash on hand at the end of the month: $76.21
What is the amount of cash over and short?

Accepted Answer

A) debit $84.73 
B) credit $84.73 
C) debit $160.94 
D) credit $160.94 
E) no cash over or short would be recorded 
A) debit $84.73 
B) credit $84.73 
C) debit $160.94 
D) credit $160.94 
E) no cash over or short would be recorded

Why is it a matter of good internal control to deposit all cash receipts daily and make all payments for goods and services by check?

At the end of the day,the cash register's record shows $1,000 but the count of cash in the register is $1,035.The proper entry to record this excess includes a:

On a bank statement,deposits are shown as __________________,because the depositor's account is a liability on the bank's records.

A good system of internal control:

List the main principles of internal controls.

The days' sales uncollected ratio is used to:

A check:

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

A voucher is an internal file that:

What are some of the risks for a company converting from GAAP to IFRS?

A good voucher system includes a set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

On a bank statement,deposits are listed as debits because the bank increases its cash account when the deposit is made.

Liquidity refers to a company's ability to pay its short-term obligations.

An invoice is a document that is used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

A __________________________ is a document explaining the payment of a check.

The internal document that is prepared by a department manager to inform the purchasing department of its needs is called the ________________________.

An effective voucher system has limited ability in preventing a dishonest employee from colluding with a dishonest supplier to fraudulently acquire cash payments for goods and services not received.

Maintaining adequate business records is an important internal control principle.

A check involves 3 parties: the maker who signs the check,the payee who is the recipient and the bank on which the check is drawn.

Given the following information: Petty cash balance: $450.00 Courier receipt: $82.50 Postage receipt: $ 48.00 Office Supplies receipt: $56.22 Business Meal receipt: $102.34 Cash on hand at the end of the month: $76.21 What is the amount of cash over and short?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 6: Reporting and Analyzing Cash and Internal Controls

Why is it a matter of good internal control to deposit all cash receipts daily and make all payments for goods and services by check?

At the end of the day,the cash register's record shows $1,000 but the count of cash in the register is $1,035.The proper entry to record this excess includes a:

On a bank statement,deposits are shown as __________________,because the depositor's account is a liability on the bank's records.

A good system of internal control:

List the main principles of internal controls.

The days' sales uncollected ratio is used to:

A check:

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

A voucher is an internal file that:

What are some of the risks for a company converting from GAAP to IFRS?

A good voucher system includes a set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

On a bank statement,deposits are listed as debits because the bank increases its cash account when the deposit is made.

Liquidity refers to a company's ability to pay its short-term obligations.

An invoice is a document that is used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

A __________________________ is a document explaining the payment of a check.

The internal document that is prepared by a department manager to inform the purchasing department of its needs is called the ________________________.

An effective voucher system has limited ability in preventing a dishonest employee from colluding with a dishonest supplier to fraudulently acquire cash payments for goods and services not received.

Maintaining adequate business records is an important internal control principle.

A check involves 3 parties: the maker who signs the check,the payee who is the recipient and the bank on which the check is drawn.

Given the following information: Petty cash balance: $450.00 Courier receipt: $82.50 Postage receipt: $ 48.00 Office Supplies receipt: $56.22 Business Meal receipt: $102.34 Cash on hand at the end of the month: $76.21 What is the amount of cash over and short?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters