Question 1

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Accepted Answer

A)  Dr Bank charges$\quad $$\quad $$\quad $Cr Cash 
B)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Other revenue 
C)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Accounts payable 
D)  Dr Accounts payable$\quad $$\quad $Cr Cash 
A)  Dr Bank charges$\quad $$\quad $$\quad $Cr Cash 
B)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Other revenue 
C)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Accounts payable 
D)  Dr Accounts payable$\quad $$\quad $Cr Cash A

Question 2

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Accepted Answer

A)  clear establishment of responsibility lines. 
B)  maintenance of effective records. 
C)  separation of record-keeping from handling assets. 
D)  physical protection of sensitive assets. 
A)  clear establishment of responsibility lines. 
B)  maintenance of effective records. 
C)  separation of record-keeping from handling assets. 
D)  physical protection of sensitive assets. D

Question 3

Segregation of duties involves:

Accepted Answer

A)  ensuring that only qualified accountants are employed in the accounting department. 
B)  separation of record-keeping from handling of assets. 
C)  providing each staff member with an individual password. 
D)  separating the tasks of employees. 
A)  ensuring that only qualified accountants are employed in the accounting department. 
B)  separation of record-keeping from handling of assets. 
C)  providing each staff member with an individual password. 
D)  separating the tasks of employees. B

Question 4

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 5

Which of the following is NOT true of a sound system of internal control?

Accepted Answer

A)  Implementation of controls involves costs. 
B)  A sound system of internal control is the responsibility of management. 
C)  All errors and irregularities should be eliminated. 
D)  A sound system of internal control is fundamental to the production of reliable financial reports. 
A)  Implementation of controls involves costs. 
B)  A sound system of internal control is the responsibility of management. 
C)  All errors and irregularities should be eliminated. 
D)  A sound system of internal control is fundamental to the production of reliable financial reports.

Question 6

Which of the following statements about the bank statement is NOT true?

Accepted Answer

A)  The bank statement shows the amount payable by the customer. 
B)  The bank statement summarises the activity in a cheque account. 
C)  If the customer of the bank has a substantial bank overdraft,the closing balance will normally be a debit. 
D)  It is the source document for bank charges. 
A)  The bank statement shows the amount payable by the customer. 
B)  The bank statement summarises the activity in a cheque account. 
C)  If the customer of the bank has a substantial bank overdraft,the closing balance will normally be a debit. 
D)  It is the source document for bank charges.

Question 7

Alison Ltd's bank statement showed a debit balance of $7000 at 31 December.It also showed bank service charges of $1100 and a direct credit received from a customer for the company amounting to $300.Unpresented cheques were $700 and there was an outstanding deposit for $2300
-What was the final bank balance in Alison Ltd's ledger at 31 December?

Accepted Answer

A)  $5400 Dr 
B)  $5400 Cr 
C)  $8600 Dr 
D)  $8600 Cr 
A)  $5400 Dr 
B)  $5400 Cr 
C)  $8600 Dr 
D)  $8600 Cr

Question 8

Tell Ltd's bank statement showed a credit balance of $7000 at 30 November.It also showed bank service charges of $1100 and the collection of a note for the company amounting to $300.Unpresented cheques were $700 and there was an outstanding deposit for $2300.
- What was the bank balance in Tell Ltd's books at 30 November before the adjustments?

Accepted Answer

A)  $7800 Dr 
B)  $7900 Cr 
C)  $8600 Cr 
D)  $9400 Dr 
A)  $7800 Dr 
B)  $7900 Cr 
C)  $8600 Cr 
D)  $9400 Dr

Question 9

Included in the bank statement was a debit for an NSF (not sufficient funds)cheque received from a customer.What entry is required in the company's accounts?

Accepted Answer

A)  Dr Other revenue$\quad $$\quad $$\quad $Cr Cash 
B)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Other revenue 
C)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Accounts receivable 
D)  Dr Accounts receivable$\quad $$\quad $Cr Cash 
A)  Dr Other revenue$\quad $$\quad $$\quad $Cr Cash 
B)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Other revenue 
C)  Dr Cash$\quad $$\quad $$\quad $$\quad $$\quad $$\quad $Cr Accounts receivable 
D)  Dr Accounts receivable$\quad $$\quad $Cr Cash

Question 10

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 11

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 12

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Accepted Answer

A)  bank statement. 
B)  bank reconciliation statement. 
C)  bank control account. 
D)  cash flow statement. 
A)  bank statement. 
B)  bank reconciliation statement. 
C)  bank control account. 
D)  cash flow statement.

Question 13

Simon Ltd's bank statement showed a credit balance of $14 000 at 31 October.It also showed bank service charges of $2200 and a direct credit received from a customer amounting to $600.Unpresented cheques were $1400 and there was an outstanding deposit for $4600.
- What was the bank balance in Simon Ltd's books at 31 October before the adjustments?

Accepted Answer

A)  $15600 Dr 
B)  $15800 Cr 
C)  $17200 Cr 
D)  $18800 Dr 
A)  $15600 Dr 
B)  $15800 Cr 
C)  $17200 Cr 
D)  $18800 Dr

Question 14

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

Accepted Answer

A)  Error by the bank 
B)  Error by the company 
C)  Unpresented cheques at end of the month 
D)  Receipts not yet banked 
A)  Error by the bank 
B)  Error by the company 
C)  Unpresented cheques at end of the month 
D)  Receipts not yet banked

Question 15

The debit recorded in the journal to reimburse the petty cash fund is to:

Accepted Answer

A)  petty cash. 
B)  accounts receivable. 
C)  cash. 
D)  various accounts for which the petty cash was disbursed. 
A)  petty cash. 
B)  accounts receivable. 
C)  cash. 
D)  various accounts for which the petty cash was disbursed.

Question 16

In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

Accepted Answer

A)  the outstanding cheques of $9400 and the deposit in transit of $2900. 
B)  the direct credit for $500 and the interest charge of $760. 
C)  only the interest on overdraft charge of $760. 
D)  the direct credit for $500,the interest charge of $760 and outstanding cheques of $9400. 
A)  the outstanding cheques of $9400 and the deposit in transit of $2900. 
B)  the direct credit for $500 and the interest charge of $760. 
C)  only the interest on overdraft charge of $760. 
D)  the direct credit for $500,the interest charge of $760 and outstanding cheques of $9400.

Question 17

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 18

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Accepted Answer

A)  discourages inefficient use of resources. 
B)  helps management safeguard assets. 
C)  assists management in controlling the enterprise. 
D)  prevents collusion between employees. 
A)  discourages inefficient use of resources. 
B)  helps management safeguard assets. 
C)  assists management in controlling the enterprise. 
D)  prevents collusion between employees.

Question 19

In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

Accepted Answer

A)  Dr Accounts receivable$750$\quad $$\quad $Cr Cash$750 
B)  Dr Accounts receivable$750$\quad $$\quad $Cr Inventory$750 
C)  Dr Accounts payable$750$\quad $$\quad $$\quad $Cr Cash$750 
D)  Cr Accounts receivable$750$\quad $$\quad $Dr Cash$750 
A)  Dr Accounts receivable$750$\quad $$\quad $Cr Cash$750 
B)  Dr Accounts receivable$750$\quad $$\quad $Cr Inventory$750 
C)  Dr Accounts payable$750$\quad $$\quad $$\quad $Cr Cash$750 
D)  Cr Accounts receivable$750$\quad $$\quad $Dr Cash$750

Question 20

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Segregation of duties involves:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Which of the following is NOT true of a sound system of internal control?

Which of the following statements about the bank statement is NOT true?

Included in the bank statement was a debit for an NSF (not sufficient funds)cheque received from a customer.What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

The debit recorded in the journal to reimburse the petty cash fund is to:

In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 7: Internal Control and Cash

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Segregation of duties involves:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Which of the following is NOT true of a sound system of internal control?

Which of the following statements about the bank statement is NOT true?

Included in the bank statement was a debit for an NSF (not sufficient funds)cheque received from a customer.What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

The debit recorded in the journal to reimburse the petty cash fund is to:

In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, accounting Standards and Auditing

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters