Question 1

A bank statement debit memo describes a transaction that increases a customer's account balance.

Accepted Answer

A) True 
 B)False

Question 2

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

Accepted Answer

A) True 
 B)False

Question 3

On September 30 the bank statement of Fine Company showed a balance of $7,800.The following information was revealed by comparing the bank statement to the cash balance in Fine's accounting records:
Deposits in transit amounted to $3,150
Outstanding checks amounted to $6,200
A $550 check was incorrectly drawn on Fine's account
NSF checks returned by the bank were $750
The bank service charge was $29
Credit memo for $75 for the collection of one of the company's account receivable
What is the true cash balance?

Accepted Answer

A) $5,346 
B) $5,300 
C) $4,596 
D) $7,096 
A) $5,346 
B) $5,300 
C) $4,596 
D) $7,096

Question 4

An error is considered material if it would trigger an IRS audit.

Accepted Answer

A) True 
 B)False

Question 5

Most audits result in unqualified audit opinions.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not a common feature of an internal control system?

Accepted Answer

A) Segregating duties 
B) Performance evaluation 
C) Bonding employees 
D) Implementing the most effective marketing plan 
A) Segregating duties 
B) Performance evaluation 
C) Bonding employees 
D) Implementing the most effective marketing plan

Question 7

How will a certified check be shown on a company's bank reconciliation?

Accepted Answer

A) As a deduction to the company's unadjusted book balance. 
B) As an increase to the bank's unadjusted bank balance. 
C) As a deduction to the bank's unadjusted bank balance. 
D) There is no adjustment when preparing the bank reconciliation. 
A) As a deduction to the company's unadjusted book balance. 
B) As an increase to the bank's unadjusted bank balance. 
C) As a deduction to the bank's unadjusted bank balance. 
D) There is no adjustment when preparing the bank reconciliation.

Question 8

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

Accepted Answer

A) Preparing a record of all cash collections immediately upon receipt 
B) Providing copies of written receipts to customers 
C) Depositing cash receipts in a bank on a timely basis 
D) Marking supporting documents Paid when checks are signed 
A) Preparing a record of all cash collections immediately upon receipt 
B) Providing copies of written receipts to customers 
C) Depositing cash receipts in a bank on a timely basis 
D) Marking supporting documents Paid when checks are signed

Question 9

If the financial statements cannot be relied upon because they contain one or more material departures from GAAP,what type of opinion will the auditor issue?

Accepted Answer

A) Qualified opinion 
B) Disclaimer of opinion 
C) Adverse opinion 
D) Unqualified opinion 
A) Qualified opinion 
B) Disclaimer of opinion 
C) Adverse opinion 
D) Unqualified opinion

Question 10

Assuming the entries used to record the disbursements and to replenish the fund are combined,which of the following is included in the entry to replenish a petty cash fund?

Accepted Answer

A) A credit to Cash 
B) A credit to Petty Cash 
C) Credits to expenses 
D) A debit to Cash 
A) A credit to Cash 
B) A credit to Petty Cash 
C) Credits to expenses 
D) A debit to Cash

Question 11

Which of the following is an internal control procedure used to safeguard a company's assets?

Accepted Answer

A) Depositing cash receipts in a bank on a timely basis 
B) Segregation of duties 
C) Preparing a bank reconciliation 
D) All of these answer choices are correct 
A) Depositing cash receipts in a bank on a timely basis 
B) Segregation of duties 
C) Preparing a bank reconciliation 
D) All of these answer choices are correct

Question 12

Segregation of duties in an organization should be required to reduce the likelihood of theft.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is not a motive for the embezzlement of cash by employees?

Accepted Answer

A) Cash is the common unit of measurement 
B) Ownership of cash is difficult to prove 
C) Cash has universal appeal 
D) Small quantities of high-denomination currency can represent significant value 
A) Cash is the common unit of measurement 
B) Ownership of cash is difficult to prove 
C) Cash has universal appeal 
D) Small quantities of high-denomination currency can represent significant value

Question 14

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following procedures are typically used when a petty cash fund is established?

Accepted Answer

A) Assigning a petty cash custodian. 
B) Use of petty cash vouchers. 
C) Physical control over the petty cash fund. 
D) All of these procedures are used when a petty cash fund is established. 
A) Assigning a petty cash custodian. 
B) Use of petty cash vouchers. 
C) Physical control over the petty cash fund. 
D) All of these procedures are used when a petty cash fund is established.

Question 16

Which of the following internal control procedures should be implemented to control cash?

Accepted Answer

A) Disbursements by prenumbered checks 
B) Depositing cash receipts in the bank on a timely basis 
C) Providing copies of written receipts to customers 
D) All of these answer choices are correct 
A) Disbursements by prenumbered checks 
B) Depositing cash receipts in the bank on a timely basis 
C) Providing copies of written receipts to customers 
D) All of these answer choices are correct

Question 17

What is the most favorable audit opinion that a company can receive on its financial statements?

Accepted Answer

A) Adverse opinion 
B) Unqualified opinion 
C) Disclaimer of opinion 
D) Qualified opinion 
A) Adverse opinion 
B) Unqualified opinion 
C) Disclaimer of opinion 
D) Qualified opinion

Question 18

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

Accepted Answer

A) $2,200 
B) $2,000 
C) $2,700 
D) $2,400 
A) $2,200 
B) $2,000 
C) $2,700 
D) $2,400

Question 19

A review of the bank statement and accounting records of Blake Company revealed the following items:
  
-Which of the item(s)would be subtracted from the company's unadjusted book balance to determine the true cash balance?

Accepted Answer

A) Item numbers 2 and 4 
B) Item numbers 2,4,and 5 
C) Item numbers 1 and 4 
D) Item numbers 1,2,4,and 5 
A) Item numbers 2 and 4 
B) Item numbers 2,4,and 5 
C) Item numbers 1 and 4 
D) Item numbers 1,2,4,and 5

Question 20

Keatts Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

A bank statement debit memo describes a transaction that increases a customer's account balance.

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

An error is considered material if it would trigger an IRS audit.

Most audits result in unqualified audit opinions.

Which of the following is not a common feature of an internal control system?

How will a certified check be shown on a company's bank reconciliation?

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

If the financial statements cannot be relied upon because they contain one or more material departures from GAAP,what type of opinion will the auditor issue?

Assuming the entries used to record the disbursements and to replenish the fund are combined,which of the following is included in the entry to replenish a petty cash fund?

Which of the following is an internal control procedure used to safeguard a company's assets?

Segregation of duties in an organization should be required to reduce the likelihood of theft.

Which of the following is not a motive for the embezzlement of cash by employees?

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

Which of the following procedures are typically used when a petty cash fund is established?

Which of the following internal control procedures should be implemented to control cash?

What is the most favorable audit opinion that a company can receive on its financial statements?

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

A review of the bank statement and accounting records of Blake Company revealed the following items: -Which of the item(s)would be subtracted from the company's unadjusted book balance to determine the true cash balance?

Keatts Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

An Introduction to Accounting

Accounting for Accruals and Deferrals

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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Exam 6: Internal Control and Accounting for Cash

A bank statement debit memo describes a transaction that increases a customer's account balance.

For financial reporting purposes,cash generally includes currency and other items that are payable on demand,such as checks,money orders,bank drafts,and certain savings accounts.

An error is considered material if it would trigger an IRS audit.

Most audits result in unqualified audit opinions.

Which of the following is not a common feature of an internal control system?

How will a certified check be shown on a company's bank reconciliation?

Which of the following is not a common internal control procedure that would be implemented with regards to cash receipts?

If the financial statements cannot be relied upon because they contain one or more material departures from GAAP,what type of opinion will the auditor issue?

Assuming the entries used to record the disbursements and to replenish the fund are combined,which of the following is included in the entry to replenish a petty cash fund?

Which of the following is an internal control procedure used to safeguard a company's assets?

Segregation of duties in an organization should be required to reduce the likelihood of theft.

Which of the following is not a motive for the embezzlement of cash by employees?

Requiring segregation of duties in a business eliminates the need for the work of one employee to serve as a check on the work of other employees.

Which of the following procedures are typically used when a petty cash fund is established?

Which of the following internal control procedures should be implemented to control cash?

What is the most favorable audit opinion that a company can receive on its financial statements?

Duke Company's unadjusted bank balance at March 31 is $2,300.The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400.What is the true cash balance?

A review of the bank statement and accounting records of Blake Company revealed the following items: -Which of the item(s)would be subtracted from the company's unadjusted book balance to determine the true cash balance?

Keatts Company's bank statement included an NSF check written by one of its customers.What effect will the entry to recognize the NSF check have on the company's financial statements?

An Introduction to Accounting

Accounting for Accruals and Deferrals

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Current Liabilities and Payroll

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

Filters