Question 1

Shane Company gathered the following reconciling information in preparing its April bank reconciliation:  The adjusted cash balance per books on April 30 is

Accepted Answer

A)  $12,930.
B)  $14,190.
C)  $23,730.
D)  $24,990.

Question 2

Internal control is defined, in part, as a plan that safeguards

Accepted Answer

A)  all balance sheet accounts.
B)  assets.
C)  liabilities.
D)  capital stock.

Question 3

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

Accepted Answer

A)  establishment of responsibility.
B)  segregation of duties.
C)  documentation procedures.
D)  independent internal verification.

Question 4

The control principle related to not having the same person authorize and pay for goods is known as

Accepted Answer

A)  establishment of responsibility.
B)  independent internal verification.
C)  segregation of duties.
D)  rotation of duties.

Question 5

The principle of establishing responsibility does not include

Accepted Answer

A)  one person being responsible for one task.
B)  authorization of transactions.
C)  independent internal verification.
D)  approval of transactions.

Question 6

A debit balance in Cash Over and Short is reported as a

Accepted Answer

A)  contra asset.
B)  miscellaneous asset.
C)  miscellaneous expense.
D)  miscellaneous revenue.

Question 7

A debit memorandum could show the collection of a note receivable by the bank.

Accepted Answer

A) True 
 B)False

Question 8

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Accepted Answer

A)  $6,000
B)  $10,000
C)  $16,000
D)  $20,000

Question 9

The fraud triangle applies to

Accepted Answer

A)  U.S companies but not international companies.
B)  international companies but not U.S.companies.
C)  U.S.and Canadian companies but not other international companies.
D)  U.S and international companies.

Question 10

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

Accepted Answer

A)  deduct $36 from the book's balance.
B)  add $36 to the book's balance.
C)  deduct $36 from the bank's balance.
D)  deduct $584 from the book's balance.

Question 11

Related selling activities do not include

Accepted Answer

A)  ordering the merchandise.
B)  making a sale.
C)  shipping the goods.
D)  billing the customer.

Question 12

Allowing only designated personnel to handle cash receipts is an example of

Accepted Answer

A)  establishment of responsibility.
B)  segregation of duties.
C)  documentation procedures.
D)  independent internal verification.

Question 13

A petty cash fund should not be used for

Accepted Answer

A)  postage due.
B)  loans to the petty cash custodian.
C)  taxi fares.
D)  customer lunches.

Question 14

The entry to replenish a petty cash fund includes a credit to

Accepted Answer

A)  Petty Cash.
B)  Cash.
C)  Freight-in.
D)  Postage Expense.

Question 15

Internal auditors

Accepted Answer

A)  are hired by CPA firms to audit business firms.
B)  are employees of the IRS who evaluate the internal controls of companies filing tax returns.
C)  evaluate the system of internal controls for the companies that employ them.
D)  cannot evaluate the system of internal controls of the company that employs them because they are not independent.

Question 16

Under a voucher system, a prenumbered voucher is prepared for every

Accepted Answer

A)  cash receipt, regardless of source.
B)  transaction entered into by the business.
C)  expenditure except those made from petty cash.
D)  journal entry.

Question 17

Winter Gloves Company had checks outstanding totaling $12,800 on its May bank reconciliation. In June, Winter Gloves Company issued checks totaling $79,800. The July bank statement shows that $71,400 in checks cleared the bank in July. A check from one of Winter Gloves Company's customers in the amount of $2,000 was also returned marked "NSF." The amount of outstanding checks on Winter Gloves Company's July bank reconciliation should be

Accepted Answer

A)  $8,400.
B)  $19,200.
C)  $21,200.
D)  $23,200.

Question 18

In preparing its August 31, 2015 bank reconciliation, Annie Corp. has available the following information:  At August 31, 2015, Annie's adjusted cash balance is

Accepted Answer

A)  $56,700.
B)  $56,400.
C)  $68,400.
D)  $61,500.

Question 19

Cash which is restricted for a specific use should be separately reported.

Accepted Answer

A) True 
 B)False

Question 20

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation:  The adjusted cash balance per books on July 31 is

Accepted Answer

A)  $17,640.
B)  $18,840.
C)  $25,640.
D)  $26,840.

Exam 7: Fraud, Internal Control, and Cash

Shane Company gathered the following reconciling information in preparing its April bank reconciliation: The adjusted cash balance per books on April 30 is

Correct Answer
verified

The fraud triangle applies to

Correct Answer
verified

In preparing its August 31, 2015 bank reconciliation, Annie Corp. has available the following information: At August 31, 2015, Annie's adjusted cash balance is

Correct Answer
verified

Correct Answer
verified

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

Correct Answer
verified

A debit memorandum could show the collection of a note receivable by the bank.

Correct Answer
verified

Cash which is restricted for a specific use should be separately reported.

Correct Answer
verified

Allowing only designated personnel to handle cash receipts is an example of

Correct Answer
verified

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation: The adjusted cash balance per books on July 31 is

Correct Answer
verified

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Correct Answer
verified

Internal control is defined, in part, as a plan that safeguards

Correct Answer
verified

A petty cash fund should not be used for

Correct Answer
verified

The principle of establishing responsibility does not include

Correct Answer
verified

The control principle related to not having the same person authorize and pay for goods is known as

Correct Answer
verified

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

Correct Answer
verified

Under a voucher system, a prenumbered voucher is prepared for every

Correct Answer
verified

A debit balance in Cash Over and Short is reported as a

Correct Answer
verified

Related selling activities do not include

Correct Answer
verified

Internal auditors

Correct Answer
verified

The entry to replenish a petty cash fund includes a credit to

Correct Answer
verified

Exam 7: Fraud, Internal Control, and Cash

Shane Company gathered the following reconciling information in preparing its April bank reconciliation: The adjusted cash balance per books on April 30 is

Correct AnswerverifiedShow Answer

The fraud triangle applies to

Correct AnswerverifiedShow Answer

In preparing its August 31, 2015 bank reconciliation, Annie Corp. has available the following information: At August 31, 2015, Annie's adjusted cash balance is

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Having different individuals receive cash, record cash receipts, and hold the cash is an example of

Correct AnswerverifiedShow Answer

A debit memorandum could show the collection of a note receivable by the bank.

Correct AnswerverifiedShow Answer

Cash which is restricted for a specific use should be separately reported.

Correct AnswerverifiedShow Answer

Allowing only designated personnel to handle cash receipts is an example of

Correct AnswerverifiedShow Answer

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation: The adjusted cash balance per books on July 31 is

Correct AnswerverifiedShow Answer

In the month of May, Kijak Company Inc. wrote checks in the amount of $56,000. In June, checks in the amount of $76,000 were written. In May, $50,000 of these checks were presented to the bank for payment, and $66,000 in June. What is the amount of outstanding checks at the end of June?

Correct AnswerverifiedShow Answer

Internal control is defined, in part, as a plan that safeguards

Correct AnswerverifiedShow Answer

A petty cash fund should not be used for

Correct AnswerverifiedShow Answer

The principle of establishing responsibility does not include

Correct AnswerverifiedShow Answer

The control principle related to not having the same person authorize and pay for goods is known as

Correct AnswerverifiedShow Answer

If a check correctly written and paid by the bank for $584 is incorrectly recorded on the company's books for $548, the appropriate treatment on the bank reconciliation would be to

Correct AnswerverifiedShow Answer

Under a voucher system, a prenumbered voucher is prepared for every

Correct AnswerverifiedShow Answer

A debit balance in Cash Over and Short is reported as a

Correct AnswerverifiedShow Answer

Related selling activities do not include

Correct AnswerverifiedShow Answer

Internal auditors

Correct AnswerverifiedShow Answer

The entry to replenish a petty cash fund includes a credit to

Correct AnswerverifiedShow Answer

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