Question 1

The ________ requires the managers and auditors of companies whose stock is traded on an exchange (called public companies)to document and certify the system of internal controls.

Accepted Answer

Sarbanes-O...

Question 2

The following account balances are taken from Everest Events at December 31.
  Calculate the number of days' sales uncollected for both years.According to this analysis,is the company's collection of receivables improving? Explain.

Accepted Answer

Days' Sales Uncollected Ratio = Ending A...

Question 3

A voucher system's control over cash payments begins when a company incurs a liability that will result in eventual payment of cash.

Accepted Answer

A) True 
 B)False

Question 4

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of ________.

Accepted Answer

establish ...

Question 5

Pelcher Co.maintains a $400 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $110 for office supplies,$140 for merchandise inventory,and $70 for miscellaneous expenses.There is a cash overage of $4.
-The journal entry to replenish the fund on January 31 is:

Accepted Answer

A)  Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$324.
B)  Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Cash,$324.
C)  Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Petty cash,$316.
D)  Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Cash,$316.
E)  Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$400.F) B) and C)
G) A) and C)

Question 6

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash includes currency,coins,deposits in...

Question 7

All of the following are true of the number of days' sales uncollected ratio except:

Accepted Answer

A)  Is most effective in evaluating the cash sales of a company.
B)  Can be used for comparisons to other companies in the same industry.
C)  Can be used for comparisons between current and prior periods.
D)  Reflects the liquidity of receivables.
E)  Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.F) D) and E)
G) A) and E)

Question 8

A receiving report is a document used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

Accepted Answer

A) True 
 B)False

Question 9

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Accepted Answer

A)  Purchase requisition.
B)  Purchase order.
C)  Invoice.
D)  Receiving report.
E)  Invoice approval.F) B) and D)
G) All of the above

Question 10

Ryan Company deposits all cash receipts on the day they are received and makes all cash payments by check.Ryan's June bank statement shows $18,361 on deposit in the bank.Ryan's comparison of the bank statement to its cash account revealed the following: Additionally,a $29 check written and recorded by the company correctly was recorded by the bank as a $92 deduction.The adjusted cash balance per the bank records should be:

Accepted Answer

A)  $18,974
B)  $18,911
C)  $20,711
D)  $19,037
E)  $16,137F) D) and E)
G) B) and E)

Question 11

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 12

Outstanding checks,deposits in transit,and bank service charges are added to the beginning balance of the bank statement to determine the adjusted bank balance.

Accepted Answer

A) True 
 B)False

Question 13

Outstanding checks,deposits in transit,deductions for bank fees,additions for interest,and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Accepted Answer

A) True 
 B)False

Question 14

The following information is available to reconcile Dibble Co.'s book balance of cash with its bank statement cash balance as of April 30.The April 30 cash balance according to the accounting records is $68,356,and the bank statement cash balance for that date is $73,525.
a.The bank erroneously cleared a $480 check against the account in April that was not issued by Dibble.The check documentation included with the bank statement indicates the check was actually issued by Flushing Co.
b.$53 interest earned on Dibble's cash balance in the bank is not yet recorded by Dibble.
c.When the April checks are compared with entries in the accounting records,it is found that Check No.1828 had been correctly drawn for $1,530 to pay for advertising but was erroneously entered in the accounting records as $1,350.
d.The bank collected $9,970 cash on a note receivable for Dibble.Dibble did not record this transaction before receiving the statement.
e.The bank statement includes an NSF check for $895 received from a customer.Dibble did not record this NSF check before receiving the statement.
f.Dibble's April 30 daily cash receipts of $5,102 were placed in the bank's night depository on that date,but do not appear on the April 30 bank statement.
g.Dibble's April 30 cash payments journal indicates that Check No.1837 for $584 and Check No.1840 for $1,219 were both written and entered in the accounting records,but are not among the canceled checks.
1.Prepare the bank reconciliation for this company as of April 30.
2.Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of April 30.

Accepted Answer

The answer of The following information is available to reconcile...

Question 15

Cash,not including cash equivalents,includes:

Accepted Answer

A)  Postage stamps.
B)  Customer checks,cashier checks,and money orders.
C)  IOUs.
D)  Two-year certificates of deposit.
E)  Money market funds.F) A) and C)
G) A) and B)

Question 16

Preparing a bank reconciliation on a monthly basis is an example of:

Accepted Answer

A)  Establishing responsibility.
B)  Separation of duties.
C)  Protecting assets by proving the accuracy of cash records.
D)  A technological control.
E)  Poor internal control.F) D) and E)
G) C) and E)

Question 17

Bank reconciliation

Accepted Answer

A)  Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records.
B)  Short-term, highly liquid investment assets that are readily convertible to cash and close enough to their due date so that their market value will not greatly change.
C)  An internal document used to collect information to control cash payments and to ensure that a transaction is properly recorded.
D)  An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change.
E)  A measure of how quickly a company can convert its accounts receivable into cash.F) Principle that says the costs of internal controls must not exceed their benefitsG) A set of procedures and approvals designed to control cash payments and the acceptance of liabilities.H) Used by the bank to verify signatures of persons authorized to write checks.I) A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.J) The ability of a company to pay for its near-term obligations.K) C) and F)
L) B) and D)

Question 18

Voucher system

Accepted Answer

A)  Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records.
B)  Short-term, highly liquid investment assets that are readily convertible to cash and close enough to their due date so that their market value will not greatly change.
C)  An internal document used to collect information to control cash payments and to ensure that a transaction is properly recorded.
D)  An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change.
E)  A measure of how quickly a company can convert its accounts receivable into cash.F) Principle that says the costs of internal controls must not exceed their benefitsG) A set of procedures and approvals designed to control cash payments and the acceptance of liabilities.H) Used by the bank to verify signatures of persons authorized to write checks.I) A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.J) The ability of a company to pay for its near-term obligations.K) A) and E)
L) I) and J)

Question 19

Spencer 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) All of the above
G) A) and B)

Question 20

Signature card

Accepted Answer

A)  Fundamental guidelines applicable to all companies established to minimize the risk of fraud and theft and to increase the reliability and accuracy of the accounting records.
B)  Short-term, highly liquid investment assets that are readily convertible to cash and close enough to their due date so that their market value will not greatly change.
C)  An internal document used to collect information to control cash payments and to ensure that a transaction is properly recorded.
D)  An income statement account used to record the income effects of cash overages and cash shortages arising from missing petty cash receipts or errors in making change.
E)  A measure of how quickly a company can convert its accounts receivable into cash.F) Principle that says the costs of internal controls must not exceed their benefitsG) A set of procedures and approvals designed to control cash payments and the acceptance of liabilities.H) Used by the bank to verify signatures of persons authorized to write checks.I) A report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.J) The ability of a company to pay for its near-term obligations.K) A) and H)
L) B) and J)

Exam 6: Cash,fraud,and Internal Controls

Correct Answer
verified

A receiving report is a document used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

Correct Answer
verified

Bank reconciliation

Correct Answer
verified

Signature card

Correct Answer
verified

Cash,not including cash equivalents,includes:

Correct Answer
verified

Outstanding checks,deposits in transit,and bank service charges are added to the beginning balance of the bank statement to determine the adjusted bank balance.

Correct Answer
verified

The following account balances are taken from Everest Events at December 31. Calculate the number of days' sales uncollected for both years.According to this analysis,is the company's collection of receivables improving? Explain.

Correct Answer
verified
Days' Sales Uncollected Ratio = Ending A...
View Answer

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of ________.

Correct Answer
verified
establish ...
View Answer

Preparing a bank reconciliation on a monthly basis is an example of:

Correct Answer
verified

Correct Answer
verified

A voucher system's control over cash payments begins when a company incurs a liability that will result in eventual payment of cash.

Correct Answer
verified

Outstanding checks,deposits in transit,deductions for bank fees,additions for interest,and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Correct Answer
verified

The ________ requires the managers and auditors of companies whose stock is traded on an exchange (called public companies)to document and certify the system of internal controls.

Correct Answer
verified
Sarbanes-O...
View Answer

Spencer 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

Correct Answer
verified

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Correct Answer
verified

Voucher system

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

All of the following are true of the number of days' sales uncollected ratio except:

Correct Answer
verified

Explain the difference between cash and cash equivalents.

Correct Answer
verified
Cash includes currency,coins,deposits in...
View Answer

Exam 6: Cash,fraud,and Internal Controls

Correct AnswerverifiedShow Answer

A receiving report is a document used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods.

Correct AnswerverifiedShow Answer

Bank reconciliation

Correct AnswerverifiedShow Answer

Signature card

Correct AnswerverifiedShow Answer

Cash,not including cash equivalents,includes:

Correct AnswerverifiedShow Answer

Outstanding checks,deposits in transit,and bank service charges are added to the beginning balance of the bank statement to determine the adjusted bank balance.

Correct AnswerverifiedShow Answer

The following account balances are taken from Everest Events at December 31. Calculate the number of days' sales uncollected for both years.According to this analysis,is the company's collection of receivables improving? Explain.

Correct AnswerverifiedDays' Sales Uncollected Ratio = Ending A...View AnswerShow Answer

Two sales clerks not being permitted to share the same cash register is an example of the internal control principle of ________.

Correct Answerverifiedestablish ...View AnswerShow Answer

Preparing a bank reconciliation on a monthly basis is an example of:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A voucher system's control over cash payments begins when a company incurs a liability that will result in eventual payment of cash.

Correct AnswerverifiedShow Answer

Outstanding checks,deposits in transit,deductions for bank fees,additions for interest,and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Correct AnswerverifiedShow Answer

The ________ requires the managers and auditors of companies whose stock is traded on an exchange (called public companies)to document and certify the system of internal controls.

Correct AnswerverifiedSarbanes-O...View AnswerShow Answer

Spencer 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

Correct AnswerverifiedShow Answer

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Correct AnswerverifiedShow Answer

Voucher system

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

All of the following are true of the number of days' sales uncollected ratio except:

Correct AnswerverifiedShow Answer

Explain the difference between cash and cash equivalents.

Correct AnswerverifiedCash includes currency,coins,deposits in...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Days' Sales Uncollected Ratio = Ending A...
View Answer

Correct Answer
verified
establish ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Sarbanes-O...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cash includes currency,coins,deposits in...
View Answer