Question 1

In the process of reconciling its bank statement for January,Maxi's Clothing's accountant compiles the following information:  The adjusted cash balance per the books on January 31 is:

Accepted Answer

A)  $5,855
B)  $5,335
C)  $4,055
D)  $4,815
E)  $4,585F) A) and E)
G) C) and E)

Question 2

Cash equivalents:

Accepted Answer

A)  Include savings accounts.
B)  Include checking accounts.
C)  Are readily converted to a known cash amount.
D)  Include time deposits.
E)  Have no immediate value.F) A) and B)
G) All of the above

Question 3

Outstanding checks refer to checks that have been:

Accepted Answer

A)  Written,recorded,sent to payees,and received and paid by the bank.
B)  Written and not yet recorded in the company books.
C)  Held as blank checks.
D)  Written,recorded on the company books,sent to the payee,but not yet paid by the bank.
E)  Issued by the bank.F) C) and D)
G) B) and D)

Question 4

Childers Company has an established petty cash fund in the amount of $400.The fund was last reimbursed on November 30.At the end of December,the fund contained the following petty cash receipts:  If,in addition to these receipts,the petty cash fund contains $201 of cash,the journal entry to reimburse the fund on December 31 will include:

Accepted Answer

A)  A debit to Transportation-In of $73.
B)  A debit to Petty Cash of $189.
C)  A credit to Office Supplies of $66.
D)  A credit to Cash Over and Short of $10.
E)  A credit to Cash of $199.F) None of the above
G) A) and B)

Question 5

The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the _______________.

Accepted Answer

The answer of The internal document that is used to...

Question 6

A remittance advice is a(n) :

Accepted Answer

A)  Explanation for a payment by check.
B)  Bank statement.
C)  Internal voucher.
D)  Electronic funds transfer.
E)  Cancelled check.F) B) and C)
G) None of the above

Question 7

A petty cash fund was originally established with a check for $100.On August 31,which is the period end,the petty cash fund included the following:  Prepare the general journal entry to record the replenishment of the petty cash fund on August 31.

Accepted Answer

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

Question 8

A voucher is an internal document or file:

Accepted Answer

A)  Prepared after an invoice is received.
B)  Used as a substitute for an invoice if the supplier fails to send one.
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 to make sure that all goods are being ordered from an approved vendor list.F) B) and D)
G) A) and B)

Question 9

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information:  The adjusted cash balance per the books on April 30 is:

Accepted Answer

A)  $6,900
B)  $8,160
C)  $4,600
D)  $6,520
E)  $5,840F) A) and D)
G) C) and D)

Question 10

Clayborn Company' bank reconciliation as of May 31 is shown below.  The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Accepted Answer

A)  A debit to Cash of $625
B)  A debit to Cash of $5,200
C)  A credit to Cash of $4,600
D)  A credit to Cash of $600
E)  A debit to cash of $25F) All of the above
G) C) and E)

Question 11

The means of recording purchases under the assumption that the cash discount for prompt payment will be taken is called the _________________________.

Accepted Answer

The answer of The means of recording purchases under the...

Question 12

____________________ are short-term,highly liquid investment assets that are readily convertible to a known amount of cash.

Accepted Answer

The answer of ____________________ are short-term,highly liquid investment assets that...

Question 13

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794,how should this error be treated on the bank reconciliation?

Accepted Answer

A)  Subtract $45 from the bank's balance.
B)  Add $45 to the bank's balance.
C)  Subtract $45 from the book balance.
D)  Add $45 to the book balance.
E)  Subtract $45 from the bank's balance and add $45 to the book's balancE.$749 - $794 = $45 too much deducted from the company's cash account balance that must be added back to cash.F) B) and D)
G) A) and C)

Question 14

A voucher system is a set of procedures and approvals:

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.F) A) and D)
G) A) and C)

Question 15

The principles of internal control include:

Accepted Answer

A)  Separate recordkeeping from custody of assets.
B)  Maintain minimal records.
C)  Use only computerized systems.
D)  Bond all employees.
E)  Require automated sales systems.F) A) and B)
G) All of the above

Question 16

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Accepted Answer

A)  Possible misstatement of financial information.
B)  Possible fraud.
C)  Controls are significantly different across the globe.
D)  Ineffective communication of the change to investors,creditors,and others.
E)  Management's inability to certify the effectiveness of the controls.F) All of the above
G) A) and B)

Question 17

When a petty cash fund is in use:

Accepted Answer

A)  Expenses paid with petty cash are recorded when the fund is replenished.
B)  Petty Cash is debited when funds are replenished.
C)  Petty Cash is credited when funds are replenished.
D)  Expenses are not recorded.
E)  Cash is debited when funds are replenished.F) None of the above
G) A) and D)

Question 18

The three parties involved with a check are:

Accepted Answer

A)  The writer,the cashier,and the bank.
B)  The maker,the payee,and the bank.
C)  The maker,the manager,and the payee.
D)  The bookkeeper,the payee,and the bank.
E)  The signer,the cashier,and the company.F) B) and C)
G) B) and E)

Question 19

A set of procedures and approvals for verifying,approving and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n) :

Accepted Answer

A)  Internal cash system.
B)  Petty cash system.
C)  Cash disbursement system.
D)  Voucher system.
E)  Cash control system.F) C) and E)
G) C) and D)

Question 20

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Accepted Answer

A)  All withdrawals through an ATM.
B)  A fee assessed to the depositor's account.
C)  An uncollectible check.
D)  Periodic payments arranged in advance,by a depositor.
E)  A deposit to their account.F) A) and D)
G) B) and E)

Exam 8: Cash and Internal Controls

A voucher is an internal document or file:

Correct Answer
verified

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Correct Answer
verified

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Correct Answer
verified

The principles of internal control include:

Correct Answer
verified

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794,how should this error be treated on the bank reconciliation?

Correct Answer
verified

Clayborn Company' bank reconciliation as of May 31 is shown below. The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct Answer
verified

A set of procedures and approvals for verifying,approving and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n) :

Correct Answer
verified

A voucher system is a set of procedures and approvals:

Correct Answer
verified

In the process of reconciling its bank statement for January,Maxi's Clothing's accountant compiles the following information: The adjusted cash balance per the books on January 31 is:

Correct Answer
verified

The three parties involved with a check are:

Correct Answer
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The means of recording purchases under the assumption that the cash discount for prompt payment will be taken is called the _________________________.

Correct Answer
verified

Correct Answer
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The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the _______________.

Correct Answer
verified

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Correct Answer
verified

A petty cash fund was originally established with a check for $100.On August 31,which is the period end,the petty cash fund included the following: Prepare the general journal entry to record the replenishment of the petty cash fund on August 31.

Correct Answer
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Cash equivalents:

Correct Answer
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A remittance advice is a(n) :

Correct Answer
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Outstanding checks refer to checks that have been:

Correct Answer
verified

____________________ are short-term,highly liquid investment assets that are readily convertible to a known amount of cash.

Correct Answer
verified

When a petty cash fund is in use:

Correct Answer
verified

Exam 8: Cash and Internal Controls

A voucher is an internal document or file:

Correct AnswerverifiedShow Answer

In the process of reconciling its bank statement for April,Donahue Enterprises' accountant compiles the following information: The adjusted cash balance per the books on April 30 is:

Correct AnswerverifiedShow Answer

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Correct AnswerverifiedShow Answer

The principles of internal control include:

Correct AnswerverifiedShow Answer

If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794,how should this error be treated on the bank reconciliation?

Correct AnswerverifiedShow Answer

Clayborn Company' bank reconciliation as of May 31 is shown below. The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct AnswerverifiedShow Answer

A set of procedures and approvals for verifying,approving and recording obligations for eventual cash disbursement,and for issuing checks for payment only of verified,approved,and recorded obligations is referred to as a(n) :

Correct AnswerverifiedShow Answer

A voucher system is a set of procedures and approvals:

Correct AnswerverifiedShow Answer

In the process of reconciling its bank statement for January,Maxi's Clothing's accountant compiles the following information: The adjusted cash balance per the books on January 31 is:

Correct AnswerverifiedShow Answer

The three parties involved with a check are:

Correct AnswerverifiedShow Answer

The means of recording purchases under the assumption that the cash discount for prompt payment will be taken is called the _________________________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The internal document that is used to notify the appropriate person that ordered goods have been received and to describe the quantities and condition of the goods is the _______________.

Correct AnswerverifiedShow Answer

A bank does not issue a debit memorandum to notify the depositor of which of the following?

Correct AnswerverifiedShow Answer

A petty cash fund was originally established with a check for $100.On August 31,which is the period end,the petty cash fund included the following: Prepare the general journal entry to record the replenishment of the petty cash fund on August 31.

Correct AnswerverifiedShow Answer

Cash equivalents:

Correct AnswerverifiedShow Answer

A remittance advice is a(n) :

Correct AnswerverifiedShow Answer

Outstanding checks refer to checks that have been:

Correct AnswerverifiedShow Answer

____________________ are short-term,highly liquid investment assets that are readily convertible to a known amount of cash.

Correct AnswerverifiedShow Answer

When a petty cash fund is in use:

Correct AnswerverifiedShow Answer

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