Question 1

A petty cash fund was originally established with a cheque for $150. OnDecember 31, you find the following items in the petty cash fund:  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 2

The following information refers to Annie's Attic and competitors in the antiques business.  Information:Comment on the relative liquidity positions of the companies.

Accepted Answer

The answer of The following information refers to Annie's Attic...

Question 3

At the end of the day, the cash register shows a balance of $635. The cash drawer has a balance of $650. The difference of $15 should be debited to miscellaneous expense.

Accepted Answer

A) True 
 B)False

Question 4

Outstanding cheques are cheques the bank has paid and deducted from the customer's account during the month.

Accepted Answer

A) True 
 B)False

Question 5

A good system of internal control:

Accepted Answer

A) Promotes operational efficiencies. 
B) Eliminates the need for an audit. 
C) Encourages adherence to prescribed managerial policies. 
D) Both encourages adherence to prescribed managerial policies and promotes operational efficiencies. 
E) All of these answers are correct.

Question 6

On September 1, Bartoletti Company established a petty cash fund for $100. OnSeptember 10, the petty cash fund was replenished when there was $16.50 on hand and there were petty cash receipts for office supplies, $27;transportation-in, $32; and postage, $21.50. On September 15, the petty cashfund was increased to $125. Record these transactions in general journal format.

Accepted Answer

The answer of On September 1, Bartoletti Company established a...

Question 7

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 8

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Accepted Answer

A) True 
 B)False

Question 9

Discuss how banking activities promote the control of cash.

Accepted Answer

The answer of Discuss how banking activities promote the control...

Question 10

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 11

Omega Supply's current ratio is 2 to 1. Its quick ratio is .75 to 1. Omega Supply has a good credit risk because the ratios reveal no liquidity problem.

Accepted Answer

A) True 
 B)False

Question 12

Make the entry to replenish the petty cash fund at the end of January.

Accepted Answer

The answer of Make the entry to replenish the petty...

Question 13

J.C. Penney's total quick assets were $5,888 million. Its current assets were $11,700. Its current liabilities were $8,000. The quick ratio is:

Accepted Answer

A) .68. 
B) 1.5. 
C) .50. 
D) .74. 
E) 2.2.

Question 14

In reimbursing the petty cash fund:

Accepted Answer

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

Question 15

Credit card expense may be classified as:

Accepted Answer

A) A selling expense. 
B) A discount deducted from sales to get net sales. 
C) An administrative expense. 
D) All of these answers are correct. 
E) A selling expense and an administrative expense.

Question 16

Banks normally use a flat rate fee for the processing of debit card transactions and a percentage fee for the processing of credit card transactions.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

A credit memorandum from the bank may be used as:

Accepted Answer

A) A voucher. 
B) A cancelled cheque. 
C) A bank statement. 
D) An EFT. 
E) An explanation for a payment by cheque.

Question 19

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 thismonth's reconciliation, the amount of this cheque should be:

Accepted Answer

A) Noted as a memo. 
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) Added to the book balance of cash.

Question 20

Annie's Attic reported the following information for September 30.  Instructions:(1)Explain the purpose of the quick ratio.(2)Calculate the quick ratio to four decimals.(3)What does the quick ratio reveal about Annie's Attic?

Accepted Answer

The answer of Annie's Attic reported the following information for...

Exam 7: Internal Control and Cash

A petty cash fund was originally established with a cheque for $150. OnDecember 31, you find the following items in the petty cash fund: Prepare the general journal entry to record the replenishment of the petty cash fund on December 31.

The following information refers to Annie's Attic and competitors in the antiques business. Information:Comment on the relative liquidity positions of the companies.

At the end of the day, the cash register shows a balance of $635. The cash drawer has a balance of $650. The difference of $15 should be debited to miscellaneous expense.

Outstanding cheques are cheques the bank has paid and deducted from the customer's account during the month.

A good system of internal control:

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

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Discuss how banking activities promote the control of cash.

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

Omega Supply's current ratio is 2 to 1. Its quick ratio is .75 to 1. Omega Supply has a good credit risk because the ratios reveal no liquidity problem.

Make the entry to replenish the petty cash fund at the end of January.

J.C. Penney's total quick assets were $5,888 million. Its current assets were $11,700. Its current liabilities were $8,000. The quick ratio is:

In reimbursing the petty cash fund:

Credit card expense may be classified as:

Banks normally use a flat rate fee for the processing of debit card transactions and a percentage fee for the processing of credit card transactions.

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

A credit memorandum from the bank may be used as:

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 thismonth's reconciliation, the amount of this cheque should be:

Annie's Attic reported the following information for September 30. Instructions:(1)Explain the purpose of the quick ratio.(2)Calculate the quick ratio to four decimals.(3)What does the quick ratio reveal about Annie's Attic?