Question 1

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Accepted Answer

A) True 
 B)False

Question 2

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash consists of cash on hand and demand

Question 3

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is NOT a principle of internal control?

Accepted Answer

A)  Responsibilities should be clearly established. 
B)  Adequate records should be maintained. 
C)  Responsibility for related transactions should be divided. 
D)  Assets should be insured and employees bonded. 
E)  Audits should always be conducted by employees internal to the organization. 
A)  Responsibilities should be clearly established. 
B)  Adequate records should be maintained. 
C)  Responsibility for related transactions should be divided. 
D)  Assets should be insured and employees bonded. 
E)  Audits should always be conducted by employees internal to the organization.

Question 5

Risks involved in e-commerce include:

Accepted Answer

A)  Firewalls. 
B)  Encryption. 
C)  Missing documents. 
D)  Computer viruses. 
E)  All of these answers are correct. 
A)  Firewalls. 
B)  Encryption. 
C)  Missing documents. 
D)  Computer viruses. 
E)  All of these answers are correct.

Question 6

What is the main motivation for retailers to accept credit cards or debit cards?

Accepted Answer

The retailer hopes to increase

Question 7

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

Accepted Answer

A) True 
 B)False

Question 8

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Accepted Answer

A)  A discount from revenue used in determining net sales. 
B)  A selling expense. 
C)  An administrative expense 
D)  All of these answers are correct. 
E)  None of these answers is correct. 
A)  A discount from revenue used in determining net sales. 
B)  A selling expense. 
C)  An administrative expense 
D)  All of these answers are correct. 
E)  None of these answers is correct.

Question 9

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Accepted Answer

A) True 
 B)False

Question 10

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

Accepted Answer

A) True 
 B)False

Question 11

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

Accepted Answer

A) True 
 B)False

Question 12

EFT is the use of electronic communication to transfer cash from one party to another.

Accepted Answer

A) True 
 B)False

Question 13

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

Accepted Answer

A) True 
 B)False

Question 14

The acid-test ratio:

Accepted Answer

A)  Is also called the quick ratio. 
B)  Measures profitability. 
C)  Measures liquidity. 
D)  Is also called the quick ratio and measures liquidity. 
E)  All of these answers are correct. 
A)  Is also called the quick ratio. 
B)  Measures profitability. 
C)  Measures liquidity. 
D)  Is also called the quick ratio and measures liquidity. 
E)  All of these answers are correct.

Question 15

A cheque:

Accepted Answer

A)  Involves the writer,the signers,the casher,and the bank. 
B)  Involves the maker,the payee,and the bank. 
C)  Involves the maker and the payee. 
D)  Involves the bookkeeper,the payee,and the bank. 
E)  Involves the signer,the casher,and the company. 
A)  Involves the writer,the signers,the casher,and the bank. 
B)  Involves the maker,the payee,and the bank. 
C)  Involves the maker and the payee. 
D)  Involves the bookkeeper,the payee,and the bank. 
E)  Involves the signer,the casher,and the company.

Question 16

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Accepted Answer

A) True 
 B)False

Question 17

Quick assets include cash,inventory,and receivables.

Accepted Answer

A) True 
 B)False

Question 18

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 19

The use of internal controls provides guaranteed protection against losses due to operating activities.

Accepted Answer

A) True 
 B)False

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Explain the difference between cash and cash equivalents.

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Which of the following is NOT a principle of internal control?

Risks involved in e-commerce include:

What is the main motivation for retailers to accept credit cards or debit cards?

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

EFT is the use of electronic communication to transfer cash from one party to another.

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

The acid-test ratio:

A cheque:

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Quick assets include cash,inventory,and receivables.

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

The use of internal controls provides guaranteed protection against losses due to operating activities.

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

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Explain the difference between cash and cash equivalents.

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Which of the following is NOT a principle of internal control?

Risks involved in e-commerce include:

What is the main motivation for retailers to accept credit cards or debit cards?

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

EFT is the use of electronic communication to transfer cash from one party to another.

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

The acid-test ratio:

A cheque:

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Quick assets include cash,inventory,and receivables.

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

The use of internal controls provides guaranteed protection against losses due to operating activities.

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