Question 1

Signature cards, deposit tickets, checks, and bank statements are all examples of internal control devices for banking activities.

Accepted Answer

A) True 
 B)False

Question 2

Electronic funds transfers (EFTs) are decreasingly used by companies due to the inconvenience and high cost.

Accepted Answer

A) True 
 B)False

Question 3

Marshall Company's bank reconciliation as of August 31 is shown below.   The adjusting journal entries that Marshall must record for the deposit in transit is:

Accepted Answer

A) Debit Cash $4,500; credit Sales $4,500. 
B) Debit Sales $4,500; credit Notes Receivable $4,500. 
C) Debit Cash $4,500; credit Note Payable $4,500. 
D) Debit Misc.Expense $4,500; credit Cash $4,500. 
E) No journal entry is required. 
A) Debit Cash $4,500; credit Sales $4,500. 
B) Debit Sales $4,500; credit Notes Receivable $4,500. 
C) Debit Cash $4,500; credit Note Payable $4,500. 
D) Debit Misc.Expense $4,500; credit Cash $4,500. 
E) No journal entry is required.

Question 4

Rosemond Company establishes a $300 petty cash fund on September 9. On September 30, the fund shows $54 in cash along with receipts for the following expenditures: office supplies, $40; postage expenses, $123; and miscellaneous expenses, $80. The petty cashier could not account for a $3 shortage in the fund. The September 9 journal entry to establish the fund is.

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 5

All of the following are true of the number of days' sales uncollected ratio except:

Accepted Answer

A) Is most effective in evaluating the cash sales of a company. 
B) Can be used for comparisons to other companies in the same industry. 
C) Can be used for comparisons between current and prior periods. 
D) Reflects the liquidity of receivables. 
E) Measures how much time is likely to pass before the current amount of accounts receivable is received in cash. 
A) Is most effective in evaluating the cash sales of a company. 
B) Can be used for comparisons to other companies in the same industry. 
C) Can be used for comparisons between current and prior periods. 
D) Reflects the liquidity of receivables. 
E) Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.

Question 6

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227, how should this error be treated on the bank reconciliation?

Accepted Answer

A) Subtract $45 from the bank's balance. 
B) Add $45 to the bank's balance. 
C) Subtract $45 from the book balance. 
D) Add $45 to the book balance. 
E) Subtract $45 from the bank's balance and add $45 to the book's balancE.$272 - $227 = $45 not enough deducted from the company's cash account balance that must be subtracted from cash. 
A) Subtract $45 from the bank's balance. 
B) Add $45 to the bank's balance. 
C) Subtract $45 from the book balance. 
D) Add $45 to the book balance. 
E) Subtract $45 from the bank's balance and add $45 to the book's balancE.$272 - $227 = $45 not enough deducted from the company's cash account balance that must be subtracted from cash.

Question 7

Cash equivalents:

Accepted Answer

A) Are short-term, highly liquid investment assets. 
B) Include 6-month certificates of deposit. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders. 
A) Are short-term, highly liquid investment assets. 
B) Include 6-month certificates of deposit. 
C) Include checking accounts. 
D) Are recorded in petty cash. 
E) Include money orders.

Question 8

Umber Company's bank reconciliation for September is presented below. Prepare the necessary adjusting journal entries based on the reconciliation report.

Accepted Answer

The answer of Umber Company's bank reconciliation for September is...

Question 9

Insuring assets and requiring all accounting personnel to have CPA licenses are two important principles of internal control.

Accepted Answer

A) True 
 B)False

Question 10

The following information is available to reconcile Young Co.'s book balance of cash with its bank statement cash balance as of April 30. The April 30 cash balance according to the accounting records is $58,176, and the bank statement cash balance for that date is $64,005.
a. On April 30, the bank issued a credit memorandum for $53 interest earned on Young's account.
b. A credit memorandum indicates that the bank collected $9,970 cash on a note receivable for Young, and credited the balance to the company's Cash account. Young did not record this transaction before receiving the statement.
c. A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870 received from a customer. The bank assessed a $25 fee for processing it.
d. Young's April 30 daily cash receipts of $5,102 were placed in the bank's night depository on that date, but do not appear on the April 30 bank statement.
e. Young's April 30 cash disbursements journal indicates that Check No. 1837 for $584 and Check No. 1840 for $1,219 were both written and entered in the accounting records, but are not among the canceled checks.
Required: Prepare the bank reconciliation for this company as of April 30.

Accepted Answer

The answer of The following information is available to reconcile...

Question 11

At the end of the day on March 15, the cash register's record shows $1,957, but the count of cash in the register is $1,965. Prepare the general journal entry to record the day's cash sales.

Accepted Answer

The answer of At the end of the day on...

Question 12

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of _______________________.

Accepted Answer

establish

Question 13

The following account balances are taken from Everest Events at December 31.   Calculate the number of days' sales uncollected for both years. According to this analysis, is the company's collection of receivables improving? Explain.

Accepted Answer

Days' Sales Uncollected Ratio = Ending A

Question 14

The following information is available for Birch Company at December 31:   Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:

Accepted Answer

A) $29,420 
B) $41,345 
C) $31,345 
D) $39,420 
E) $38,770 
A) $29,420 
B) $41,345 
C) $31,345 
D) $39,420 
E) $38,770

Question 15

Two limitations of internal control systems are ______________ and ________________.

Accepted Answer

human error/human fr

Question 16

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $17,025. Clayborn's May bank statement shows $15,800 on deposit in the bank. Determine the adjusted cash balance using the following information:   The adjusted cash balance should be:

Accepted Answer

A) $16,400 
B) $11,200 
C) $21,000 
D) $16,425 
E) $17,000 
A) $16,400 
B) $11,200 
C) $21,000 
D) $16,425 
E) $17,000

Question 17

Ramirez Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2016, its Cash account shows an $14,445 debit balance. Ramirez Clinic's June 30 bank statement shows $13,402 on deposit in the bank. The following information is also available:   The adjusted cash balance per the books on June 30 is

Accepted Answer

A) $14,461 
B) $14,429 
C) $17,285 
D) $12,375 
E) $16,258 
A) $14,461 
B) $14,429 
C) $17,285 
D) $12,375 
E) $16,258

Question 18

In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information:   The adjusted cash balance per the books on April 30 is:

Accepted Answer

A) $6,900 
B) $8,160 
C) $4,600 
D) $6,520 
E) $5,840 
A) $6,900 
B) $8,160 
C) $4,600 
D) $6,520 
E) $5,840

Question 19

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

A) True 
 B)False

Question 20

At the end of the current period, a company reported $725,000 in net credit sales and $100,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

Accepted Answer

Days' Sales Uncollected Ratio

Signature cards, deposit tickets, checks, and bank statements are all examples of internal control devices for banking activities.

Electronic funds transfers (EFTs) are decreasingly used by companies due to the inconvenience and high cost.

Marshall Company's bank reconciliation as of August 31 is shown below. The adjusting journal entries that Marshall must record for the deposit in transit is:

All of the following are true of the number of days' sales uncollected ratio except:

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227, how should this error be treated on the bank reconciliation?

Cash equivalents:

Umber Company's bank reconciliation for September is presented below. Prepare the necessary adjusting journal entries based on the reconciliation report.

Insuring assets and requiring all accounting personnel to have CPA licenses are two important principles of internal control.

At the end of the day on March 15, the cash register's record shows $1,957, but the count of cash in the register is $1,965. Prepare the general journal entry to record the day's cash sales.

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of _______________________.

The following account balances are taken from Everest Events at December 31. Calculate the number of days' sales uncollected for both years. According to this analysis, is the company's collection of receivables improving? Explain.

The following information is available for Birch Company at December 31: Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:

Two limitations of internal control systems are and __.

In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

At the end of the current period, a company reported $725,000 in net credit sales and $100,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 6: Reporting and Analyzing Cash and Internal Controls

Signature cards, deposit tickets, checks, and bank statements are all examples of internal control devices for banking activities.

Electronic funds transfers (EFTs) are decreasingly used by companies due to the inconvenience and high cost.

Marshall Company's bank reconciliation as of August 31 is shown below. The adjusting journal entries that Marshall must record for the deposit in transit is:

All of the following are true of the number of days' sales uncollected ratio except:

If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's books for $227, how should this error be treated on the bank reconciliation?

Cash equivalents:

Umber Company's bank reconciliation for September is presented below. Prepare the necessary adjusting journal entries based on the reconciliation report.

Insuring assets and requiring all accounting personnel to have CPA licenses are two important principles of internal control.

At the end of the day on March 15, the cash register's record shows $1,957, but the count of cash in the register is $1,965. Prepare the general journal entry to record the day's cash sales.

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of _______________________.

The following account balances are taken from Everest Events at December 31. Calculate the number of days' sales uncollected for both years. According to this analysis, is the company's collection of receivables improving? Explain.

The following information is available for Birch Company at December 31: Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:

Two limitations of internal control systems are ______________ and ________________.

In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

At the end of the current period, a company reported $725,000 in net credit sales and $100,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Two limitations of internal control systems are and __.