Question 1

The clerk who has access to the cash in the cash register should not have access to the cash register tape or file.

Accepted Answer

A) True 
 B)False  True

Question 2

Control of cash disbursements is important for companies as most large thefts occur from payment of fictitious invoices.

Accepted Answer

A) True 
 B)False  True

Question 3

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Accepted Answer

A) True 
 B)False  True

Question 4

A voucher is an internal file:

Accepted Answer

A)  Prepared after an invoice is received. 
B)  Used as a substitute for an invoice. 
C)  Used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded. 
D)  Takes the place of a bank check. 
E)  Prepared before the company orders goods. 
A)  Prepared after an invoice is received. 
B)  Used as a substitute for an invoice. 
C)  Used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded. 
D)  Takes the place of a bank check. 
E)  Prepared before the company orders goods.

Question 5

Marbel had $2,816 million in sales and $555 million in ending accounts receivable for the current period. For the same period, Maxtel reported $4,885 million in sales and $491 million in ending accounts receivable. Calculate the days' sales uncollected for both companies as of the end of the current period. Which company is doing a better job in managing the collection of its receivables?

Accepted Answer

Marbel: ($555/$2,816) x 365 =

Question 6

A voucher system is a series of prescribed control procedures:

Accepted Answer

A)  Designed to eliminate the need for subsidiary ledgers. 
B)  Designed to determine if the company is operating profitably. 
C)  Used almost exclusively by small companies. 
D)  Used to ensure that the company sells on credit only to creditworthy customers. 
E)  Designed to control cash disbursements and the acceptance of obligations. 
A)  Designed to eliminate the need for subsidiary ledgers. 
B)  Designed to determine if the company is operating profitably. 
C)  Used almost exclusively by small companies. 
D)  Used to ensure that the company sells on credit only to creditworthy customers. 
E)  Designed to control cash disbursements and the acceptance of obligations.

Question 7

A company reported net sales for Year 1 of $285,000 and $575,000 for Year 2. The year-end balances of accounts receivable were $49,000 for Year 1 and $85,000 for Year 2. Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

Accepted Answer

Year 1: ($49,000/$285,000) x 365 = 63 da

Question 8

At the end of the current period, a company reported $475,000 in net credit sales and $75,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

Accepted Answer

($75,000/$

Question 9

After preparing a bank reconciliation, adjustments must be made for items reconciling the bank balance and items reconciling the book balance.

Accepted Answer

A) True 
 B)False

Question 10

The principles of internal control include: establish responsibilities, maintain adequate records, insure assets, separate recordkeeping from custody of assets, and perform regular and independent reviews.

Accepted Answer

A) True 
 B)False

Question 11

A petty cash fund was originally established with a check for $150. In the petty cash fund on December 31 (the period-end), you find the following:
Prepare the general journal entry to record the replenishment of the petty cash fund on December 31.

Accepted Answer

The answer of A petty cash fund was originally established...

Question 12

The following account balances are taken from Mesky Sports 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

280,450/1,457,600 x 365 = 70.2 days
180,

Question 13

A company had net sales of $31,500 and ending accounts receivable of $2,700 for the current period. Its days' sales uncollected equals:

Accepted Answer

A)  11.7 days. 
B)  23.3 days. 
C)  31.3 days. 
D)  42.5 days. 
E)  46.6 days. 
A)  11.7 days. 
B)  23.3 days. 
C)  31.3 days. 
D)  42.5 days. 
E)  46.6 days.

Question 14

At the end of the day, the cash register's record shows $1,250, but the count of cash in the cash register is $1,245. The correct entry to record the cash sales is

Accepted Answer

A)  Debit Cash $1,245; Credit Sales $1,245. 
B)  Debit Cash $1,245; debit Cash Over and Short $5; credit Sales $1,250. 
C)  Debit Cash $1,250; credit Sales $1,250. 
D)  Debit Cash $1,250; credit Sales $1,245, credit Cash Over and Short $5. 
E)  Debit Cash Over and Short $5, credit Sales $5. 
A)  Debit Cash $1,245; Credit Sales $1,245. 
B)  Debit Cash $1,245; debit Cash Over and Short $5; credit Sales $1,250. 
C)  Debit Cash $1,250; credit Sales $1,250. 
D)  Debit Cash $1,250; credit Sales $1,245, credit Cash Over and Short $5. 
E)  Debit Cash Over and Short $5, credit Sales $5.

Question 15

The _____________ of recording purchases records purchases under the assumption that the cash discount for prompt payment will be taken.

Accepted Answer

The answer of The _____________ of recording purchases records purchases...

Question 16

On a bank statement, deposits are shown as _________________, because the depositor's account is a liability on the bank's records.

Accepted Answer

The answer of On a bank statement, deposits are shown...

Question 17

In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information: The adjusted cash balance per the books on September 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 18

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

Accepted Answer

A)  $35,421 
B)  $50,421 
C)  $37,546 
D)  $36,246 
E)  $40,439 
A)  $35,421 
B)  $50,421 
C)  $37,546 
D)  $36,246 
E)  $40,439

Question 19

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

Accepted Answer

A)  Cash Lost. 
B)  Bank Reconciliation. 
C)  Petty Cash. 
D)  Cash Over and Short. 
E)  Cash Receivable. 
A)  Cash Lost. 
B)  Bank Reconciliation. 
C)  Petty Cash. 
D)  Cash Over and Short. 
E)  Cash Receivable.

Question 20

The entry to record reimbursement of the petty cash fund for postage expense should include:

Accepted Answer

A)  A debit to Postage Expense. 
B)  A debit to Petty Cash. 
C)  A debit to Cash. 
D)  A debit to Cash Short and Over. 
E)  A debit to Supplies. 
A)  A debit to Postage Expense. 
B)  A debit to Petty Cash. 
C)  A debit to Cash. 
D)  A debit to Cash Short and Over. 
E)  A debit to Supplies.

Exam 8: Cash and Internal Controls

The clerk who has access to the cash in the cash register should not have access to the cash register tape or file.

Control of cash disbursements is important for companies as most large thefts occur from payment of fictitious invoices.

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

A voucher is an internal file:

A voucher system is a series of prescribed control procedures:

At the end of the current period, a company reported $475,000 in net credit sales and $75,000 in ending accounts receivable. Calculate this company's days' sales uncollected at the end of the current period.

After preparing a bank reconciliation, adjustments must be made for items reconciling the bank balance and items reconciling the book balance.

The principles of internal control include: establish responsibilities, maintain adequate records, insure assets, separate recordkeeping from custody of assets, and perform regular and independent reviews.

A petty cash fund was originally established with a check for $150. In the petty cash fund on December 31 (the period-end), you find the following: Prepare the general journal entry to record the replenishment of the petty cash fund on December 31.

The following account balances are taken from Mesky Sports 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.

A company had net sales of $31,500 and ending accounts receivable of $2,700 for the current period. Its days' sales uncollected equals:

At the end of the day, the cash register's record shows $1,250, but the count of cash in the cash register is $1,245. The correct entry to record the cash sales is

The _____________ of recording purchases records purchases under the assumption that the cash discount for prompt payment will be taken.

On a bank statement, deposits are shown as _________________, because the depositor's account is a liability on the bank's records.

In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information: The adjusted cash balance per the books on September 30 is:

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

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

The entry to record reimbursement of the petty cash fund for postage expense should include:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Accounting for Receivables

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Filters