Question 1

An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called:

Accepted Answer

A)  Sales discounts.
B)  Trade discounts.
C)  Purchases discounts.
D)  Discounts lost.
E)  Discounts earned.F) A) and B)
G) C) and D)

Question 2

A company established a petty cash fund in November of the current year and experienced the following transactions affecting the fund during November:  Prepare the journal entries to establish the fund on November 1 and to reimburse the fund on November 28.

Accepted Answer

The answer of A company established a petty cash fund...

Question 3

________________ includes currency,coins,and amounts on deposit in checking accounts and savings accounts.

Accepted Answer

The answer of ________________ includes currency,coins,and amounts on deposit in...

Question 4

Internal control procedures for cash receipts do not require that:

Accepted Answer

A)  Custody over cash is kept separate from its recordkeeping.
B)  All collections for sales are be received immediately upon making the sales.
C)  Clerks having access to cash in a cash register should not have access to the register tape or file.
D)  An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.
E)  Cash sales should be recorded on a cash register at the time of each sale.F) B) and E)
G) A) and C)

Question 5

The Cash Over and Short account:

Accepted Answer

A)  Is used when the cash account reports a credit balance.
B)  Is used to record the income effects of errors in making change and/or processing petty cash transactions.
C)  Is not necessary in a computerized accounting system.
D)  Can never have a debit balance.
E)  Can never have a credit balance.F) A) and C)
G) All of the above

Question 6

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

Accepted Answer

A)  Deduct the deposit from the bank statement balance.
B)  Send the bank a debit memorandum.
C)  Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
D)  Add the deposit to the book balance of cash.
E)  Add the deposit to the bank statement balance.F) None of the above
G) A) and B)

Question 7

A company using the net method of recording purchases failed to take advantage of a discount available.When they pay the full (gross) amount of an invoice at the end of the credit period the journal entry will include a debit to:

Accepted Answer

A)  Merchandise Inventory.
B)  Sales Discounts.
C)  Discounts Lost.
D)  Cash.
E)  Accounts Receivable.F) C) and D)
G) B) and E)

Question 8

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 as...

Question 9

A company's internal control system:

Accepted Answer

A)  Eliminates the company's risk of loss.
B)  Monitors company and employee performance.
C)  Eliminates human error.
D)  Eliminates the need for audits.
E)  Eliminates the need for managers' certification of controls.F) A) and B)
G) A) and C)

Question 10

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check.At the close of business on August 31,its Cash account shows a debit balance of $13,162.Franklin's August bank statement shows $14,237 on deposit in the bank.Determine the adjusted cash balance using the following information:  The adjusted cash balance should be:

Accepted Answer

A)  $18,737
B)  $10,337
C)  $14,887
D)  $13,112
E)  $14,837F) C) and D)
G) A) and E)

Question 11

The following information is available for Montrose Company at December 31:  Based on this information,the amounts considered Cash and Cash Equivalents,respectively on December 31 are:

Accepted Answer

A)  Cash $10,430;Cash equivalents $20,400
B)  Cash $8,540;Cash equivalents $22,290
C)  Cash $8,790;Cash equivalents $26,400
D)  Cash $19,190;Cash equivalents $16,000
E)  Cash $11,235;Cash equivalents $26,400F) A) and B)
G) B) and E)

Question 12

The following information is available for the Topper Company for the month of July.
a.On July 31,after all transactions have been recorded,the balance in the company's Cash account has a balance of $15,244.
b.The company's bank statement shows a balance on July of $16,450.
c.Outstanding checks at July total $2,063.
d.A credit memo included with the bank statement indicates that the bank collected $570 on a note receivable for Topper.The $570 includes $550 principle and $20 interest.
e.A debit memo included with the bank statement shows a $107 NSF check from a customer,P.Flank.
f.A deposit placed in the bank's night depository on July 31 totaling $1,275 did not appear on the bank statement.
h.Included with the bank statement was a debit memorandum in the amount of $45 for check printing charges that have not been recorded on the company's books.
Prepare the July bank reconciliation for the Topper Company.

Accepted Answer

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

Question 13

The days' sales uncollected ratio is used to:

Accepted Answer

A)  Measure how many days of sales remain until the end of the year.
B)  Determine the number of days that have passed without collecting on accounts receivable.
C)  Identify the likelihood of collecting sales on account.
D)  Estimate how much time is likely to pass before the current amount of accounts receivable is received in cash.
E)  Measure the amount of cash sales during a period.F) A) and E)
G) A) and B)

Question 14

Ferguson Co.has a $200 petty cash fund.At the end of the first month the accumulated receipts represent $43 for delivery expenses,$127 for merchandise inventory,and $12 for miscellaneous expenses.The fund has a balance of $18.The journal entry to record the reimbursement of the account includes a:

Accepted Answer

A)  Debit to Petty Cash for $200.
B)  Debit to Cash Over and Short for $18.
C)  Credit to Cash for $182.
D)  Credit to Inventory for $127.
E)  Credit to Cash Over and Short for $18.F) B) and D)
G) C) and E)

Question 15

The internal document prepared to notify the appropriate persons that goods ordered have been received,describing the quantities and condition of the goods is the

Accepted Answer

A)  Purchase requisition.
B)  Purchase order.
C)  Invoice.
D)  Receiving report.
E)  Invoice approval.F) None of the above
G) A) and E)

Question 16

Internal control policies and procedures have limitations not including:

Accepted Answer

A)  Human error.
B)  Human fraud.
C)  Cost-benefit principle.
D)  Collusion.
E)  Establishing responsibilities.F) D) and E)
G) A) and E)

Question 17

The following information is taken from Reagan Company's December 31 balance sheet:  If net credit sales for the current year were $612,000,the firm's days' sales uncollected for the year is:

Accepted Answer

A)  60 days
B)  85 days
C)  42 days
D)  154 days
E)  70 daysF) A) and C)
G) B) and E)

Question 18

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________________.

Accepted Answer

The answer of When a company purchases an insurance policy...

Question 19

Merchandise with an invoice price of $2,000 was purchased on February 3,terms 2/15,n/60.The company uses the net method to record purchases.The entry to record the cash payment of this purchase obligation on February 17 is:

Accepted Answer

A)  Debit Accounts Payable $1,960;credit Cash $1,960.
B)  Debit Accounts Payable $2,000;credit Cash $2,000.
C)  Debit Accounts Payable $1,960;debit Discounts Lost $40;credit Cash $2,000.
D)  Debit Accounts Payable $2,000;credit Merchandise Inventory $40;credit Cash $1,960.
E)  Debit Accounts Payable $2,000;credit Discounts Lost $40;credit Cash $1,960.F) B) and D)
G) B) and C)

Question 20

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

Accepted Answer

A)  After the mail is opened,a list (in triplicate) of the money received is prepared with a record of the sender's name,the amount,and an explanation of why the money is sent.
B)  The bank reconciliation is prepared by a person who does not handle cash or record cash receipts.
C)  For safety,only one person should open the mail,and that person should immediately deposit the cash received in the bank.
D)  The cashier deposits the money in the bank and the recordkeeper records the amounts received in the accounting records.
E)  The employees handling the cash receipts are bonded.F) A) and E)
G) B) and E)

Exam 8: Cash and Internal Controls

A company using the net method of recording purchases failed to take advantage of a discount available.When they pay the full (gross) amount of an invoice at the end of the credit period the journal entry will include a debit to:

Correct Answer
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The following information is available for Montrose Company at December 31: Based on this information,the amounts considered Cash and Cash Equivalents,respectively on December 31 are:

Correct Answer
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Correct Answer
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Internal control policies and procedures have limitations not including:

Correct Answer
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Merchandise with an invoice price of $2,000 was purchased on February 3,terms 2/15,n/60.The company uses the net method to record purchases.The entry to record the cash payment of this purchase obligation on February 17 is:

Correct Answer
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The internal document prepared to notify the appropriate persons that goods ordered have been received,describing the quantities and condition of the goods is the

Correct Answer
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An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called:

Correct Answer
verified

A company established a petty cash fund in November of the current year and experienced the following transactions affecting the fund during November: Prepare the journal entries to establish the fund on November 1 and to reimburse the fund on November 28.

Correct Answer
verified

Ferguson Co.has a $200 petty cash fund.At the end of the first month the accumulated receipts represent $43 for delivery expenses,$127 for merchandise inventory,and $12 for miscellaneous expenses.The fund has a balance of $18.The journal entry to record the reimbursement of the account includes a:

Correct Answer
verified

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

Correct Answer
verified

Correct Answer
verified

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

Correct Answer
verified

The days' sales uncollected ratio is used to:

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

________________ includes currency,coins,and amounts on deposit in checking accounts and savings accounts.

Correct Answer
verified

A company's internal control system:

Correct Answer
verified

The following information is taken from Reagan Company's December 31 balance sheet: If net credit sales for the current year were $612,000,the firm's days' sales uncollected for the year is:

Correct Answer
verified

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________________.

Correct Answer
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Internal control procedures for cash receipts do not require that:

Correct Answer
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The Cash Over and Short account:

Correct Answer
verified

Exam 8: Cash and Internal Controls

A company using the net method of recording purchases failed to take advantage of a discount available.When they pay the full (gross) amount of an invoice at the end of the credit period the journal entry will include a debit to:

Correct AnswerverifiedShow Answer

The following information is available for Montrose Company at December 31: Based on this information,the amounts considered Cash and Cash Equivalents,respectively on December 31 are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Internal control policies and procedures have limitations not including:

Correct AnswerverifiedShow Answer

Merchandise with an invoice price of $2,000 was purchased on February 3,terms 2/15,n/60.The company uses the net method to record purchases.The entry to record the cash payment of this purchase obligation on February 17 is:

Correct AnswerverifiedShow Answer

The internal document prepared to notify the appropriate persons that goods ordered have been received,describing the quantities and condition of the goods is the

Correct AnswerverifiedShow Answer

An expense resulting from failing to take advantage of cash discounts when using the net method of recording purchases is called:

Correct AnswerverifiedShow Answer

A company established a petty cash fund in November of the current year and experienced the following transactions affecting the fund during November: Prepare the journal entries to establish the fund on November 1 and to reimburse the fund on November 28.

Correct AnswerverifiedShow Answer

Ferguson Co.has a $200 petty cash fund.At the end of the first month the accumulated receipts represent $43 for delivery expenses,$127 for merchandise inventory,and $12 for miscellaneous expenses.The fund has a balance of $18.The journal entry to record the reimbursement of the account includes a:

Correct AnswerverifiedShow Answer

Which of the following procedures would weaken control over cash receipts that arrive through the mail?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30,in preparing the September 30 bank reconciliation,the company should:

Correct AnswerverifiedShow Answer

The days' sales uncollected ratio is used to:

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

________________ includes currency,coins,and amounts on deposit in checking accounts and savings accounts.

Correct AnswerverifiedShow Answer

A company's internal control system:

Correct AnswerverifiedShow Answer

The following information is taken from Reagan Company's December 31 balance sheet: If net credit sales for the current year were $612,000,the firm's days' sales uncollected for the year is:

Correct AnswerverifiedShow Answer

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________________.

Correct AnswerverifiedShow Answer

Internal control procedures for cash receipts do not require that:

Correct AnswerverifiedShow Answer

The Cash Over and Short account:

Correct AnswerverifiedShow Answer

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