Question 1

The objectives of internal control are to

Accepted Answer

A)  control the internal organization of the Accounting Department personnel and equipment
B)  provide reasonable assurance that assets are safeguarded and used for business purposes, financial reports are accurate, and laws and regulations are complied with
C)  prevent fraud and promote the social interest of the company
D)  provide control over "internal-use only" reports and employee internal conductE) C) and D)
F) B) and C)

Question 2

In preparing a bank reconciliation,the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.

Accepted Answer

A) True 
 B)False

Question 3

Cash equivalents

Accepted Answer

A)  are illegal in some states
B)  will be converted to cash within two years
C)  will be converted to cash within 90 days
D)  will be converted to cash within 120 daysE) B) and D)
F) A) and D)

Question 4

What entry is required in the company's accounts to record outstanding checks?

Accepted Answer

A)  debit Accounts Receivable; credit Cash
B)  debit Cash; credit Accounts Receivable
C)  debit Cash; credit Accounts Payable
D)  no entry requiredE) A) and D)
F) None of the above

Question 5

A $200 petty cash fund has cash of $20 and receipts of $177.The journal entry to replenish the account would include a credit to

Accepted Answer

A)  Cash for $20
B)  Cash Short and Over for $3
C)  Petty Cash for $190
D)  Cash for $180E) B) and C)
F) A) and B)

Question 6

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.
-Outstanding checks

Accepted Answer

A)  Added to the company's books
B)  Subtracted from the company's books
C)  Added to the bank statement balance
D)  Subtracted from the bank statement balanceE) None of the above
F) A) and B)

Question 7

A check for $342 was erroneously charged by the bank as $432.In order for the bank reconciliation to balance,you must add $90 to the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 8

Match the following elements of internal control:
-Control procedures

Accepted Answer

A)  Provides reasonable assurance that business goals will be achieved
B)  Used by management for guiding operations and ensuring compliance with requirements
C)  Overall attitude of management and employees
D)  Used to locate weaknesses and improve controls
E)  Identify, analyze, and assess likeliness of vulnerabilitiesF) A) and B)
G) B) and D)

Question 9

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Accepted Answer

A)  an expense on the income statement
B)  income on the income statement
C)  an asset on the balance sheet
D)  a liability on the balance sheetE) A) and D)
F) C) and D)

Question 10

After a bank reconciliation is completed,journal entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 11

A voucher is usually supported by

Accepted Answer

A)  a supplier's invoice
B)  a purchase order
C)  a receiving report
D)  All of these choicesE) B) and D)
F) All of the above

Question 12

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.
-EFT deposit from a customer

Accepted Answer

A)  Added to the company's books
B)  Subtracted from the company's books
C)  Added to the bank statement balance
D)  Subtracted from the bank statement balanceE) A) and B)
F) A) and C)

Question 13

Entries are made to the petty cash account when

Accepted Answer

A)  making payments out of the fund
B)  recording shortages in the fund
C)  replenishing the petty cash fund
D)  establishing the fundE) None of the above
F) A) and D)

Question 14

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430.This item would be included on the bank reconciliation as a (n)

Accepted Answer

A)  addition to the balance per the company's records
B)  addition to the balance per the bank statement
C)  deduction from the balance per the bank statement
D)  deduction from the balance per the company's recordsE) C) and D)
F) A) and C)

Question 15

If the balance in Cash Short and Over at the end of a period is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Accepted Answer

A) True 
 B)False

Question 16

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation.
-NSF check

Accepted Answer

A)  Added to the company's books
B)  Subtracted from the company's books
C)  Added to the bank statement balance
D)  Subtracted from the bank statement balanceE) C) and D)
F) A) and C)

Question 17

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430.What entry is required in the company's accounts?

Accepted Answer

A)  debit Accounts Payable; credit Cash
B)  debit Cash; credit Accounts Receivable
C)  debit Cash; credit Accounts Payable
D)  debit Accounts Receivable; credit CashE) A) and D)
F) B) and C)

Question 18

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

Accepted Answer

A)  credit to Petty Cash for $29
B)  debit to Cash for $83
C)  debit to Cash Short and Over for $13
D)  credit to Cash for $54E) B) and D)
F) None of the above

Question 19

"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

Accepted Answer

A)  the FASB
B)  the IRS
C)  Sarbanes-Oxley
D)  GAAPE) A) and B)
F) B) and D)

Question 20

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company.This item is a (n)

Accepted Answer

A)  deduction from the balance per company's records
B)  addition to the balance per bank statement
C)  deduction from the balance per bank statement
D)  addition to the balance per company's recordsE) B) and C)
F) A) and C)

Exam 8: Internal Control and Cash

Entries are made to the petty cash account when

Correct AnswerverifiedShow Answer

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation. -EFT deposit from a customer

Correct AnswerverifiedShow Answer

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation. -Outstanding checks

Correct AnswerverifiedShow Answer

What entry is required in the company's accounts to record outstanding checks?

Correct AnswerverifiedShow Answer

The objectives of internal control are to

Correct AnswerverifiedShow Answer

Cash equivalents

Correct AnswerverifiedShow Answer

A $200 petty cash fund has cash of $20 and receipts of $177.The journal entry to replenish the account would include a credit to

Correct AnswerverifiedShow Answer

Assign the letter to indicate whether the following items would be added or subtracted from the company's books or the bank statement during the construction of a bank reconciliation. -NSF check

Correct AnswerverifiedShow Answer

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430.What entry is required in the company's accounts?

Correct AnswerverifiedShow Answer

A check for $342 was erroneously charged by the bank as $432.In order for the bank reconciliation to balance,you must add $90 to the bank statement balance.

Correct AnswerverifiedShow Answer

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Correct AnswerverifiedShow Answer

A voucher is usually supported by

Correct AnswerverifiedShow Answer

A $150 petty cash fund has cash of $54 and receipts of $83.The journal entry to replenish the account would include a

Correct AnswerverifiedShow Answer

Match the following elements of internal control: -Control procedures

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company.This item is a (n)

Correct AnswerverifiedShow Answer

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430.This item would be included on the bank reconciliation as a (n)

Correct AnswerverifiedShow Answer

"To maintain public confidence and trust in the financial reporting of companies" is the purpose of

Correct AnswerverifiedShow Answer

If the balance in Cash Short and Over at the end of a period is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Correct AnswerverifiedShow Answer

After a bank reconciliation is completed,journal entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified