Question 1

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 2

At Radiant,Inc. ,the sales department is also responsible for recording cash transactions as it does not have a separate accounting department.
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 3

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer.
Baker Auto Supply purchases merchandise inventory from A & B Company.The accountant places the order,verifies receipt of the merchandise,and records the transaction in the general journal.

Accepted Answer

Weakness
There is a weakness in the sepa

Question 4

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 5

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer.
The movie theater has the following policy.Tickets are sold by the cashier.The ticket stubs are collected by the ticket taker.The ticket stubs are stored in a locked box,and the accounting personnel match the number of ticket stubs to the number of tickets sold.

Accepted Answer

Strength
The operations are ke

Question 6

The following information is needed to reconcile the cash balance for Baker's Dry Cleaning,Inc.
 
What was the adjusted book balance?

Accepted Answer

A) $18,800 
B) $16,200 
C) $18,730 
D) $18,870 
A) $18,800 
B) $16,200 
C) $18,730 
D) $18,870

Question 7

Which of the following statements is true of the Sarbanes-Oxley Act?

Accepted Answer

A) Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients. 
B) Those who commit securities fraud must be sentenced to 10 years in prison. 
C) All private and foreign companies must issue an internal control report evaluated by an outside auditor. 
D) The Public Company Accounting Oversight Board oversees the work of auditors of public companies. 
A) Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients. 
B) Those who commit securities fraud must be sentenced to 10 years in prison. 
C) All private and foreign companies must issue an internal control report evaluated by an outside auditor. 
D) The Public Company Accounting Oversight Board oversees the work of auditors of public companies.

Question 8

Separating the custody of assets from accounting implies that the accountants must not handle cash and the cashier must not have access to the accounting records.

Accepted Answer

A) True 
 B)False

Question 9

The following information is available for Ashland Company for the month ending June 30,2017.
   
Prepare bank reconciliation for Ashland Company for June 30,2017.

Accepted Answer

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

Question 10

A company has a cash ratio of 2.3.What does this imply?

Accepted Answer

A) The company has an unnecessarily large amount of cash supply. 
B) The company does not have enough cash supply. 
C) The company is not in a position to pay off its long-term liabilities. 
D) The company is not in a position to pay off its current liabilities. 
A) The company has an unnecessarily large amount of cash supply. 
B) The company does not have enough cash supply. 
C) The company is not in a position to pay off its long-term liabilities. 
D) The company is not in a position to pay off its current liabilities.

Question 11

Which of the following describes the environment in internal control?

Accepted Answer

A) Internal auditors monitor company controls to safeguard assets,and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The environment is the "tone at the top" of the business. 
C) The environment is designed to ensure that the business earns profit. 
D) A company must identify its risks. 
A) Internal auditors monitor company controls to safeguard assets,and external auditors monitor the controls to ensure that the accounting records are accurate. 
B) The environment is the "tone at the top" of the business. 
C) The environment is designed to ensure that the business earns profit. 
D) A company must identify its risks.

Question 12

Prepare the journal entries for the following petty cash transactions of Allen Coffee Shop.

Accepted Answer

The answer of Prepare the journal entries for the following...

Question 13

Electronic funds transfer moves cash by electronic communications.

Accepted Answer

A) True 
 B)False

Question 14

Campaign 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 15

A check was written by a business for $507 but was recorded in the journal as $705.How would this error be included on the bank reconciliation?

Accepted Answer

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

Question 16

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 17

Which of the following statements describes a receiving report?

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 18

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 19

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 20

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

Exam 8: Internal Control and Cash

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

At Radiant,Inc. ,the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. In the above situation,which internal control procedure needs strengthening?

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

The following information is needed to reconcile the cash balance for Baker's Dry Cleaning,Inc. What was the adjusted book balance?

Which of the following statements is true of the Sarbanes-Oxley Act?

Separating the custody of assets from accounting implies that the accountants must not handle cash and the cashier must not have access to the accounting records.

The following information is available for Ashland Company for the month ending June 30,2017. Prepare bank reconciliation for Ashland Company for June 30,2017.

A company has a cash ratio of 2.3.What does this imply?

Which of the following describes the environment in internal control?

Prepare the journal entries for the following petty cash transactions of Allen Coffee Shop.

Electronic funds transfer moves cash by electronic communications.

Campaign 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 check was written by a business for $507 but was recorded in the journal as $705.How would this error be included on the bank reconciliation?

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?

Which of the following statements describes a receiving report?

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

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

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

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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