Question 1

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Accepted Answer

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

Question 2

Define an internal control system and describe the purpose that it serves.

Accepted Answer

An internal control system refers to the...

Question 3

Match between columns
                        Premises:  A company uses a check protector.
 A company has separate departments for purchasing, receiving and accounts payable.
 A company buys an insurance policy to protect against employee theft.
 A company uses a computerized point of sale system.
 A company uses a voucher system.
 A company hires CPAs to perform an audit.
 No two clerks share the same cash drawer.
 A company has an internal auditor on staff.
 Cashier does not have access to the cash register recorded tape or file.
 The bookkeeper prepares and signs checks.

Accepted Answer

The Answer of Establish responsibility. and Divide responsibility for related is...

Question 4

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

Accepted Answer

A) True 
 B)False

Question 5

An analysis that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a (n) :

Accepted Answer

A)   Internal audit.
B)   Bank reconciliation.
C)   Bank audit.
D)   Trial reconciliation.
E)   Analysis of debits and credits.

Question 6

Good internal control dictates that a person who controls an asset should also maintain the accounting records for that asset.

Accepted Answer

A) True 
 B)False

Question 7

Cash, not including cash equivalents, includes:

Accepted Answer

A)   Postage stamps.
B)   Coins, currency, and checking accounts.
C)   IOUs.
D)   Two-year certificates of deposit.
E)   Money market funds.

Question 8

Collusion is when a person embezzles money from a company and tries to hide the evidence.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements best describes how GAAP and IFRS treat cash?

Accepted Answer

A)   Accounting definitions for cash are similar for U.S. GAAP and IFRS.
B)   IFRS are more strict about what is considered cash than GAAP .
C)   GAAP is more strict about what is considered cash than IFRS.
D)   IFRS requires a cash balance of at least 10% of total assets; IFRS requires a cash balance of at least 5% of total assets.
E)   GAAP requires anything other than coins and bills in hand to be classified as cash equivalents while IFRS classifies coins and bills as cash equivalents.

Question 10

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.

Question 11

A voucher is an internal file that:

Accepted Answer

A)   Is prepared after an invoice is received.
B)   Is used as a substitute for an invoice.
C)   Is 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)   Is prepared before the company orders goods.

Question 12

Triple Company's accountant made an entry that included the following items: debit postage expense $12.42, debit office supplies expense $27.33, credit cash over/short $2.19. If the original amount in petty cash is $320, how much is in petty cash before the reimbursement?

Accepted Answer

A)   $320.00
B)   $282.44
C)   $37.56
D)   $39.75
E)   $41.94

Question 13

Two sales clerks should not share the same cash register. This refers to the internal control principle of _______________________.

Accepted Answer

establish ...

Question 14

Based on the following information, prepare the November bank reconciliation for the Avisa Company.
The following information is available for the Avisa Company for the month of November:
a. On November 30, after all transactions have been recorded, the balance in the company's Cash account has a balance of $27,202.
b. The company's bank statement shows a balance on November 30 of $29,279.
c. Outstanding checks at November 30 include check #3030 in the amount of $1,525 and check #3556 in the amount of $1,459.
d. A credit memo included with the bank statement indicates that the bank collected $780 on a noninterest-bearing note receivable for Avisa. The bank deducted a $10 collection fee and credited the remainder of $770 to Avisa's account.
e. A debit memo included with the bank statement shows a $67 NSF check from a customer, J. Brown.
f. A deposit placed in the bank's night depository on November 30 totaled $1,675 and did not appear on the bank statement.
g. Examination of the checks on the bank statement with the entries in the accounting records reveals that check #3445 for the payment of an account payable was correctly written for $2,450, but was recorded in the accounting records as $2,540.
h. Included with the bank statement was a debit memorandum in the amount of $25 for bank service charges. It has not been recorded on the company's books.

Accepted Answer

The answer of Based on the following information, prepare the...

Question 15

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 16

The document that the purchasing department prepares and sends to the vendor to place an order is the:

Accepted Answer

A)   Purchase requisition
B)   Purchase order
C)   Invoice
D)   Receiving report
E)   Invoice approval

Question 17

A check involves three parties: the maker who signs the check, the payee who is the recipient, and the bank on which the check is drawn.

Accepted Answer

A) True 
 B)False

Question 18

A company established a $400 petty cash fund by issuing a check to the custodian on October 1. On October 15, the petty cash fund was replenished and increased to $1,000 in total. The contents of the petty cash fund at the time of the October 15 replenishment were:
  Prepare the general journal entry to record both the reimbursement and the increase of the petty cash fund on October 15.

Accepted Answer

The answer of A company established a $400 petty cash...

Question 19

The following information is available for the Edwards Company for its March 31 bank reconciliation:
From the March 31 bank statement:
  NSF: A check from a customer, Cook Co. in payment of their account.
IN: Interest earned on the account.
From the Edwards Company's accounting records:
   a. Based on the above information, prepare a bank reconciliation for the Edwards Company.
b. Prepare the necessary general journal entries to adjust cash to the reconciled balance.

Accepted Answer

The answer of The following information is available for the...

Question 20

Match between columns
                        Premises: A document signed by the depositor instructing the bank to pay a specified amount to a designated recipient.
The seller of goods or services.
All the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies.
An itemized statement of goods prepared by the vendor that lists the customer's name, the items sold, the sales price of each item, and the terms of sale.
An asset such as cash that can be readily used to settle short-term obligations.
Short-term, highly liquid investments that are readily convertible to known cash amount and are sufficiently close to their maturity date so that the market value is not sensitive to interest rate change.
Money kept to cover the cost of small incidental payments.
Checks written by the depositor, deducted on the depositor's records, sent to the payees, but not yet received by the bank for payment.
Currency, coins, and amounts on deposit in bank checking and many savings accounts.
An internal document listing the goods needed by a department and requesting that it be purchased.

Accepted Answer

The Answer of Liquid asset and Internal control system and is...

Exam 6: Accounting for Cash and Internal Controls

Two sales clerks should not share the same cash register. This refers to the internal control principle of _______________________.

Correct Answer
verified
establish ...
View Answer

Correct Answer
verified

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Correct Answer
verified

Cash, not including cash equivalents, includes:

Correct Answer
verified

A voucher is an internal file that:

Correct Answer
verified

Correct Answer
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Triple Company's accountant made an entry that included the following items: debit postage expense $12.42, debit office supplies expense $27.33, credit cash over/short $2.19. If the original amount in petty cash is $320, how much is in petty cash before the reimbursement?

Correct Answer
verified

Define an internal control system and describe the purpose that it serves.

Correct Answer
verified
An internal control system refers to the...
View Answer

Good internal control dictates that a person who controls an asset should also maintain the accounting records for that asset.

Correct Answer
verified

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

Correct Answer
verified

Collusion is when a person embezzles money from a company and tries to hide the evidence.

Correct Answer
verified

The document that the purchasing department prepares and sends to the vendor to place an order is the:

Correct Answer
verified

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

Correct Answer
verified

Match the following terms with the appropriate definition:.

Which of the following statements best describes how GAAP and IFRS treat cash?

Correct Answer
verified

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

Correct Answer
verified

Match each of the following transactions with the applicable internal control principle

A check involves three parties: the maker who signs the check, the payee who is the recipient, and the bank on which the check is drawn.

Correct Answer
verified

An analysis that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a (n) :

Correct Answer
verified

Exam 6: Accounting for Cash and Internal Controls

Two sales clerks should not share the same cash register. This refers to the internal control principle of _______________________.

Correct Answerverifiedestablish ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Correct AnswerverifiedShow Answer

Cash, not including cash equivalents, includes:

Correct AnswerverifiedShow Answer

A voucher is an internal file that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Triple Company's accountant made an entry that included the following items: debit postage expense $12.42, debit office supplies expense $27.33, credit cash over/short $2.19. If the original amount in petty cash is $320, how much is in petty cash before the reimbursement?

Correct AnswerverifiedShow Answer

Define an internal control system and describe the purpose that it serves.

Correct AnswerverifiedAn internal control system refers to the...View AnswerShow Answer

Good internal control dictates that a person who controls an asset should also maintain the accounting records for that asset.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Collusion is when a person embezzles money from a company and tries to hide the evidence.

Correct AnswerverifiedShow Answer

The document that the purchasing department prepares and sends to the vendor to place an order is the:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match the following terms with the appropriate definition:.

Which of the following statements best describes how GAAP and IFRS treat cash?

Correct AnswerverifiedShow Answer

Technologically advanced accounting systems do not need monitoring for errors because computers always process transactions correctly.

Correct AnswerverifiedShow Answer

Match each of the following transactions with the applicable internal control principle

A check involves three parties: the maker who signs the check, the payee who is the recipient, and the bank on which the check is drawn.

Correct AnswerverifiedShow Answer

An analysis that explains any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement is a (n) :

Correct AnswerverifiedShow Answer

Correct Answer
verified
establish ...
View Answer

Correct Answer
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An internal control system refers to the...
View Answer

Correct Answer
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Correct Answer
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