Question 1

The primary reason that businesses keep their cash in a bank account is the ability to earn interest.

Accepted Answer

A) True 
 B)False

Question 2

At Carlson Services,the cashier collects checks and cash from customers,and the junior accountant records the transactions in the journal.The controller approves the journal entries and bank reconciliations.The treasurer signs checks and approves contracts.Which internal control procedure is exemplified in the above situation?

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

Companies receive cash either over the counter,through the mail,or by electronic funds transfer.

Accepted Answer

A) True 
 B)False

Question 4

An information system is one of the five components by which a company can achieve its internal control objectives.

Accepted Answer

A) True 
 B)False

Question 5

All items on the book side of the bank reconciliation require journal entries.

Accepted Answer

A) True 
 B)False

Question 6

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

The answer of Refer to the following bank reconciliation.
 ...

Question 8

Match each term to its definition.
-Purchase Order

Accepted Answer

A) Sent by the vendor after the inventory has been shipped to the purchaser. 
B) Sent to the vendor when goods are ordered. 
C) Prepared by the purchaser when the goods are received. 
D) Sent to the vendor after all approving documents have been submitted. 
A) Sent by the vendor after the inventory has been shipped to the purchaser. 
B) Sent to the vendor when goods are ordered. 
C) Prepared by the purchaser when the goods are received. 
D) Sent to the vendor after all approving documents have been submitted.

Question 9

In addition to the account number,a check shows the 9-digit routing number.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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

Question 11

Superstore Electronics reported the following figures in its 2019 and 2018 financial statements.
   Compute the cash ratio for 2019 and 2018.What does the cash ratio measure? Use this information to discuss the business performance of Superstore Electronics.

Accepted Answer

@#IMG-DLM& The cash ratio measures the company's a

Question 12

Burglar alarms,fire alarms,and security cameras improve internal control.

Accepted Answer

A) True 
 B)False

Question 13

Reducing expenses to increase operating profit is representative of ________.

Accepted Answer

A) safeguarding assets 
B) following company policies 
C) promoting operational efficiency 
D) ensuring accurate,reliable accounting records 
A) safeguarding assets 
B) following company policies 
C) promoting operational efficiency 
D) ensuring accurate,reliable accounting records

Question 14

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer.
-
Fifth National Bank requires mandatory vacations and job rotation.

Accepted Answer

Strength
If an employee never

Question 15

In a bank reconciliation,outstanding checks will be shown on the bank side of the reconciliation.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) NSF checks 
B) EFT 
C) Service Charge 
D) Deposits 
A) NSF checks 
B) EFT 
C) Service Charge 
D) Deposits

Question 17

A petty cash fund was established with a $550 balance.It currently has cash of $105 and petty cash tickets as shown below:   Which of the following would be the journal entry to replenish the Petty Cash account?

Accepted Answer

A) debit various expenses $445;credit Cash $445 
B) debit various expenses $445;credit Petty Cash $445 
C) debit Cash $105;credit various expenses $105 
D) credit Petty Cash $445;debit Cash $445 
A) debit various expenses $445;credit Cash $445 
B) debit various expenses $445;credit Petty Cash $445 
C) debit Cash $105;credit various expenses $105 
D) credit Petty Cash $445;debit Cash $445

Question 18

Vaughan Services hires a new accountant to maintain its petty cash fund.Although the employee possesses an accounting degree,he/she had been previously convicted of embezzlement.Which internal control procedure needs to be addressed in this situation?

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 19

Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time.

Accepted Answer

A) True 
 B)False

Question 20

A petty cash fund was established with a $200 balance.It currently has cash of $35 and petty cash tickets as follows: Office expense $130 and Entertainment Expense $45.Which of the following would be included in the journal entry to replenish the Petty Cash fund?

Accepted Answer

A) debit to Cash Short & Over for $25 
B) credit to Cash Short & Over for $10 
C) credit to Cash Short & Over for $25 
D) debit to Cash Short & Over for $10 
A) debit to Cash Short & Over for $25 
B) credit to Cash Short & Over for $10 
C) credit to Cash Short & Over for $25 
D) debit to Cash Short & Over for $10

The primary reason that businesses keep their cash in a bank account is the ability to earn interest.

Companies receive cash either over the counter,through the mail,or by electronic funds transfer.

An information system is one of the five components by which a company can achieve its internal control objectives.

All items on the book side of the bank reconciliation require journal entries.

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

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

Match each term to its definition. -Purchase Order

In addition to the account number,a check shows the 9-digit routing number.

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

Superstore Electronics reported the following figures in its 2019 and 2018 financial statements. Compute the cash ratio for 2019 and 2018.What does the cash ratio measure? Use this information to discuss the business performance of Superstore Electronics.

Burglar alarms,fire alarms,and security cameras improve internal control.

Reducing expenses to increase operating profit is representative of ________.

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer. - Fifth National Bank requires mandatory vacations and job rotation.

In a bank reconciliation,outstanding checks will be shown on the bank side of the reconciliation.

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

A petty cash fund was established with a $550 balance.It currently has cash of $105 and petty cash tickets as shown below: Which of the following would be the journal entry to replenish the Petty Cash account?

Vaughan Services hires a new accountant to maintain its petty cash fund.Although the employee possesses an accounting degree,he/she had been previously convicted of embezzlement.Which internal control procedure needs to be addressed in this situation?

Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time.

A petty cash fund was established with a $200 balance.It currently has cash of $35 and petty cash tickets as follows: Office expense $130 and Entertainment Expense $45.Which of the following would be included in the journal entry to replenish the Petty Cash fund?

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

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Exam 8: Internal Control and Cash

The primary reason that businesses keep their cash in a bank account is the ability to earn interest.

Companies receive cash either over the counter,through the mail,or by electronic funds transfer.

An information system is one of the five components by which a company can achieve its internal control objectives.

All items on the book side of the bank reconciliation require journal entries.

If the bank reconciliation includes a deposit in transit,a journal entry is required that includes a debit to cash.

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

Match each term to its definition. -Purchase Order

In addition to the account number,a check shows the 9-digit routing number.

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

Superstore Electronics reported the following figures in its 2019 and 2018 financial statements. Compute the cash ratio for 2019 and 2018.What does the cash ratio measure? Use this information to discuss the business performance of Superstore Electronics.

Burglar alarms,fire alarms,and security cameras improve internal control.

Reducing expenses to increase operating profit is representative of ________.

For the following situation,state whether it represents a strength or weakness in internal control and give the reason for your answer. - Fifth National Bank requires mandatory vacations and job rotation.

In a bank reconciliation,outstanding checks will be shown on the bank side of the reconciliation.

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

A petty cash fund was established with a $550 balance.It currently has cash of $105 and petty cash tickets as shown below: Which of the following would be the journal entry to replenish the Petty Cash account?

Vaughan Services hires a new accountant to maintain its petty cash fund.Although the employee possesses an accounting degree,he/she had been previously convicted of embezzlement.Which internal control procedure needs to be addressed in this situation?

Internal control is an organizational plan that ensures that the financial statements are prepared and submitted on time.

A petty cash fund was established with a $200 balance.It currently has cash of $35 and petty cash tickets as follows: Office expense $130 and Entertainment Expense $45.Which of the following would be included in the journal entry to replenish the Petty Cash fund?

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

Filters