Question 1

When used to monitor and control operations,internal control systems are a low priority for managers.

Accepted Answer

A) True 
 B)False

Question 2

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

Accepted Answer

A) True 
 B)False

Question 3

In reimbursing the petty cash fund:

Accepted Answer

A)  Cash is debited. 
B)  Petty Cash is credited. 
C)  Petty Cash is debited. 
D)  Expense accounts are debited. 
E)  Petty Cash is credited and expense accounts are debited. 
A)  Cash is debited. 
B)  Petty Cash is credited. 
C)  Petty Cash is debited. 
D)  Expense accounts are debited. 
E)  Petty Cash is credited and expense accounts are debited.

Question 4

Cash equivalents are short-term investments that a company invests in to increase earnings.

Accepted Answer

A) True 
 B)False

Question 5

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Accepted Answer

A) True 
 B)False

Question 6

Guy Company's records revealed the following data for September:   * This error relates to a deposit from a customer on account made on September 14.The correct amount of the deposit was $1,322.However,the bookkeeper had recorded it as $1,100.
Prepare the general journal entries necessary to correct the Cash balance.

Accepted Answer

The answer of Guy Company's records revealed the following data...

Question 7

Internal control policies and procedures are standard across companies.

Accepted Answer

A) True 
 B)False

Question 8

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Accepted Answer

A) True 
 B)False

Question 9

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

Accepted Answer

A)  A debit to Miscellaneous Expenses for $377.50. 
B)  A credit to Cash Over and Short for $5.00. 
C)  A debit to Petty Cash for $382.50. 
D)  A credit to Cash for $387.50. 
E)  A debit to Cash for $387.50. 
A)  A debit to Miscellaneous Expenses for $377.50. 
B)  A credit to Cash Over and Short for $5.00. 
C)  A debit to Petty Cash for $382.50. 
D)  A credit to Cash for $387.50. 
E)  A debit to Cash for $387.50.

Question 10

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Accepted Answer

A) True 
 B)False

Question 11

Credit cards are seen as an advantage by businesses because the cash is normally received quicker than with other forms of extended credit.

Accepted Answer

A) True 
 B)False

Question 12

A cheque that was outstanding on last month's bank reconciliation was not among the cancelled cheques returned by the bank this month.As a result,in preparing this month's reconciliation,the amount of this cheque should be:

Accepted Answer

A)  Added to the book balance of cash. 
B)  Deducted from the book balance of cash. 
C)  Added to the bank balance of cash. 
D)  Deducted from the bank balance of cash. 
E)  Noted as a memo. 
A)  Added to the book balance of cash. 
B)  Deducted from the book balance of cash. 
C)  Added to the bank balance of cash. 
D)  Deducted from the bank balance of cash. 
E)  Noted as a memo.

Question 13

All monies disbursed from petty cash should be documented by a petty cash receipt.

Accepted Answer

A) True 
 B)False

Question 14

Z-Mart plans to eliminate a $200 petty cash fund.The current balance in the account includes $45 in receipts and $165 in currency.The entry to eliminate the fund will include a:

Accepted Answer

A)  Debit to Cash Short and Over for $10. 
B)  Debit to Cash for $165. 
C)  Debit to Miscellaneous Expenses for $35. 
D)  Credit to Petty Cash for $165. 
E)  Credit to Cash for $165. 
A)  Debit to Cash Short and Over for $10. 
B)  Debit to Cash for $165. 
C)  Debit to Miscellaneous Expenses for $35. 
D)  Credit to Petty Cash for $165. 
E)  Credit to Cash for $165.

Question 15

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit to Accounts Receivable.

Accepted Answer

A) True 
 B)False

Question 16

If Cash Over and Short has a debit at the end of the period,the dollar amount represents miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 17

A bank issues a debit memorandum:

Accepted Answer

A)  To notify a depositor of all increases to the depositor's account. 
B)  To notify a depositor of a deduction from a depositor's account. 
C)  To notify a depositor of an NSF cheque. 
D)  To notify a depositor of an EFT. 
E)  To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque. 
A)  To notify a depositor of all increases to the depositor's account. 
B)  To notify a depositor of a deduction from a depositor's account. 
C)  To notify a depositor of an NSF cheque. 
D)  To notify a depositor of an EFT. 
E)  To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque.

Question 18

Cash consists of:

Accepted Answer

A)  Postage stamps. 
B)  Coins,currency,and chequing accounts. 
C)  IOUs. 
D)  Certificates of deposit. 
E)  Coins,currency,chequing accounts,and certificates of deposit. 
A)  Postage stamps. 
B)  Coins,currency,and chequing accounts. 
C)  IOUs. 
D)  Certificates of deposit. 
E)  Coins,currency,chequing accounts,and certificates of deposit.

Question 19

Z-Mart had $43 in missing petty cash receipts.The correct procedure is to:

Accepted Answer

A)  Debit Cash Over and Short for $43. 
B)  Credit Cash Over and Short for $43. 
C)  Debit Petty Cash for $43. 
D)  Credit Petty Cash for $43. 
E)  Credit Cash for $43. 
A)  Debit Cash Over and Short for $43. 
B)  Credit Cash Over and Short for $43. 
C)  Debit Petty Cash for $43. 
D)  Credit Petty Cash for $43. 
E)  Credit Cash for $43.

Question 20

Bank debit cards get their name from:

Accepted Answer

A)  The fact that a debit is made to Cash by the business receiving the money. 
B)  Banks debit your account when they take the money out of it. 
C)  It is the opposite of a credit card. 
D)  The fact that a debit is made to Cash by the business receiving the money and banks debit your account when they take the money out of it. 
E)  None of these answers is correct. 
A)  The fact that a debit is made to Cash by the business receiving the money. 
B)  Banks debit your account when they take the money out of it. 
C)  It is the opposite of a credit card. 
D)  The fact that a debit is made to Cash by the business receiving the money and banks debit your account when they take the money out of it. 
E)  None of these answers is correct.

When used to monitor and control operations,internal control systems are a low priority for managers.

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

In reimbursing the petty cash fund:

Cash equivalents are short-term investments that a company invests in to increase earnings.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Internal control policies and procedures are standard across companies.

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Credit cards are seen as an advantage by businesses because the cash is normally received quicker than with other forms of extended credit.

A cheque that was outstanding on last month's bank reconciliation was not among the cancelled cheques returned by the bank this month.As a result,in preparing this month's reconciliation,the amount of this cheque should be:

All monies disbursed from petty cash should be documented by a petty cash receipt.

Z-Mart plans to eliminate a $200 petty cash fund.The current balance in the account includes $45 in receipts and $165 in currency.The entry to eliminate the fund will include a:

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit to Accounts Receivable.

If Cash Over and Short has a debit at the end of the period,the dollar amount represents miscellaneous revenue.

A bank issues a debit memorandum:

Cash consists of:

Z-Mart had $43 in missing petty cash receipts.The correct procedure is to:

Bank debit cards get their name from:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Receivables

Filters

Exam 8: Internal Control and Cash

When used to monitor and control operations,internal control systems are a low priority for managers.

A bank reconciliation explains the difference between the balance of a chequing account on the customer's books and the balance on the bank statement.

In reimbursing the petty cash fund:

Cash equivalents are short-term investments that a company invests in to increase earnings.

The acid-test ratio is a more accurate measure of a company's liquidity than the current ratio.

Internal control policies and procedures are standard across companies.

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

The custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month.The entry to replenish the petty cash fund will include:

Liquidity measures how easily assets can be converted to another asset or be used to pay for services or obligations.

Credit cards are seen as an advantage by businesses because the cash is normally received quicker than with other forms of extended credit.

A cheque that was outstanding on last month's bank reconciliation was not among the cancelled cheques returned by the bank this month.As a result,in preparing this month's reconciliation,the amount of this cheque should be:

All monies disbursed from petty cash should be documented by a petty cash receipt.

Z-Mart plans to eliminate a $200 petty cash fund.The current balance in the account includes $45 in receipts and $165 in currency.The entry to eliminate the fund will include a:

An NSF cheque for $17.50 would be recorded as a debit to Cash and a credit to Accounts Receivable.

If Cash Over and Short has a debit at the end of the period,the dollar amount represents miscellaneous revenue.

A bank issues a debit memorandum:

Cash consists of:

Z-Mart had $43 in missing petty cash receipts.The correct procedure is to:

Bank debit cards get their name from:

Accounting in Business

Analyzing and Reporting Transactions

Adjusting Accounts for Financial Statements

Completing the Accounting Cycle and Classifying Accounts

Accounting for Merchandising Activities

Merchandise Inventory and Cost of Sales

Accounting Information Systems

Receivables

Filters