Question 1

Journal entries are required for the reconciling items on the book side because ________.

Accepted Answer

A) those transactions have not yet been recorded by the bank 
B) the adjusted balances on both sides are the same amounts 
C) the amounts are immaterial 
D) those transactions have not yet been recorded on the company's books 
A) those transactions have not yet been recorded by the bank 
B) the adjusted balances on both sides are the same amounts 
C) the amounts are immaterial 
D) those transactions have not yet been recorded on the company's books D

Question 2

The petty cash fund had an initial imprest balance of $210.It currently has $17 in cash,$4 in miscellaneous cash receipts,and an additional $183 in specific cash receipts.The debit to Cash Short & Over would be ________.

Accepted Answer

A) $6 
B) $17 
C) $183 
D) $187 
A) $6 
B) $17 
C) $183 
D) $187 A

Question 3

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

Accepted Answer

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

Question 4

Which of the following is an attribute of the internal control procedure-competent,reliable,and ethical personnel?

Accepted Answer

A) providing cross training to allow sales personnel to record revenue transactions 
B) the need to train and supervise employees 
C) monitoring of internal controls by external auditors 
D) purchase of burglar alarms 
A) providing cross training to allow sales personnel to record revenue transactions 
B) the need to train and supervise employees 
C) monitoring of internal controls by external auditors 
D) purchase of burglar alarms

Question 5

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund,is known as the ________.

Accepted Answer

A) control system 
B) voucher system 
C) balanced system 
D) imprest system 
A) control system 
B) voucher system 
C) balanced system 
D) imprest system

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

A deposit receipt is ________.

Accepted Answer

A) retained by the customer as proof of a deposit transaction 
B) the same as a signature card 
C) used by the bank as an alternative to a remittance advice 
D) given by the customer to the bank as a proof of deposit 
A) retained by the customer as proof of a deposit transaction 
B) the same as a signature card 
C) used by the bank as an alternative to a remittance advice 
D) given by the customer to the bank as a proof of deposit

Question 8

A business keeps cash in a bank account because banks have established practices for safeguarding the business's money.

Accepted Answer

A) True 
 B)False

Question 9

The following information is available for Jack's,Inc.for the current month.
 
What is the adjusted book balance on the bank reconciliation?

Accepted Answer

A) $9,055 
B) $7,575 
C) $6,780 
D) $6,850 
A) $9,055 
B) $7,575 
C) $6,780 
D) $6,850

Question 10

For strong controls over cash receipts,the checks to be deposited should be sent to the treasurer,and the remittance advices should be sent to the accounting department.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The environment is the culture of a business,and it starts with the CEO or CFO and the top managers.

Accepted Answer

A) True 
 B)False

Question 13

A company has a petty cash fund amount of $200.When replenished,it has petty cash receipts of $32 for gas expense,$33 for postage expense,$14 for supplies expense,and $9 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited for ________.

Accepted Answer

A) $88 
B) $74 
C) $65 
D) $79 
A) $88 
B) $74 
C) $65 
D) $79

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

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 17

The petty cash fund has a current balance of $200.Based on activity in the fund,it is determined that the balance needs to be changed to $400.Which journal entry is needed to make this change?

Accepted Answer

A) Debit the Petty Cash account and credit the Cash account for $400. 
B) No journal entry is needed because this change only involves cash. 
C) Debit the Petty Cash account and credit the Cash account for $200. 
D) Debit the Cash account and credit the Petty Cash account for $200. 
A) Debit the Petty Cash account and credit the Cash account for $400. 
B) No journal entry is needed because this change only involves cash. 
C) Debit the Petty Cash account and credit the Cash account for $200. 
D) Debit the Cash account and credit the Petty Cash account for $200.

Question 18

The Sarbanes-Oxley Act requires all private companies in the United States to maintain an internal control system.

Accepted Answer

A) True 
 B)False

Question 19

On a bank reconciliation,deposits in transit are added on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 8: Internal Control and Cash

Journal entries are required for the reconciling items on the book side because ________.

The petty cash fund had an initial imprest balance of $210.It currently has $17 in cash,$4 in miscellaneous cash receipts,and an additional $183 in specific cash receipts.The debit to Cash Short & Over would be ________.

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

Which of the following is an attribute of the internal control procedure-competent,reliable,and ethical personnel?

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund,is known as the ________.

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

A deposit receipt is ________.

A business keeps cash in a bank account because banks have established practices for safeguarding the business's money.

The following information is available for Jack's,Inc.for the current month. What is the adjusted book balance on the bank reconciliation?

For strong controls over cash receipts,the checks to be deposited should be sent to the treasurer,and the remittance advices should be sent to the accounting department.

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

The environment is the culture of a business,and it starts with the CEO or CFO and the top managers.

A company has a petty cash fund amount of $200.When replenished,it has petty cash receipts of $32 for gas expense,$33 for postage expense,$14 for supplies expense,and $9 for miscellaneous expenses.Assume the cash balance is not over or short.In the journal entry,Cash would be credited for ________.

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

A company check for payment must be signed by ________.

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

The petty cash fund has a current balance of $200.Based on activity in the fund,it is determined that the balance needs to be changed to $400.Which journal entry is needed to make this change?

The Sarbanes-Oxley Act requires all private companies in the United States to maintain an internal control system.

On a bank reconciliation,deposits in transit are added on the bank side of the reconciliation.

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

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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