Question 1

Internal control systems are:

Accepted Answer

A)   Developed by the Securities and Exchange Commission for public companies.
B)   Developed by the Small Business Administration for non-public companies.
C)   Developed by the Internal Revenue Service for all U.S. companies.
D)   Required by Sarbanes-Oxley (SOX)  to be documented and certified if the company's stock is traded on an exchange (a public company) .
E)   Required only if a company plans to engage in interstate commerce.F) A) and B)
G) A) and C)

Question 2

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Accepted Answer

A) True 
 B)False

Question 3

A ________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Accepted Answer

The answer of A ________ is a report explaining any...

Question 4

At the end of the day,the cash register's record shows $2,050,but the count of cash in the cash register is $2,058.The correct entry to record the cash sales is

Accepted Answer

A)   Debit Cash $2,058; credit Sales $2,058.
B)   Debit Cash $2,058; credit Cash Over and Short $8; credit Sales $2,050.
C)   Debit Cash $2,050; credit Sales $2,050.
D)   Debit Cash $2,050; debit Cash Over and Short $8; credit Sales $2,058.
E)   Debit Cash Over and Short $8, credit Sales $8.F) C) and E)
G) None of the above

Question 5

A bank statement provided by the bank includes:

Accepted Answer

A)   A list of outstanding checks.
B)   A list of petty cash amounts.
C)   The beginning and the ending balance of the depositor's account.
D)   A listing of deposits in transit.
E)   A reconciliation to the depositor cash account.F) C) and D)
G) B) and D)

Question 6

A check involves 3 parties: a maker who signs the check,a payee who is the recipient,and a bank on which the check is drawn.

Accepted Answer

A) True 
 B)False

Question 7

Cash equivalents meet all of the following criteria except:

Accepted Answer

A)   Readily convertible to a known cash amount.
B)   Short-term investments purchased within 3 months of their maturity dates.
C)   Have a market value that is not sensitive to interest rate changes.
D)   Short-term U.S. treasury bills.
E)   More liquid than cash.F) A) and B)
G) B) and D)

Question 8

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Accepted Answer

A) True 
 B)False

Question 9

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) C) and D)
G) A) and B)

Question 10

Petty cash reimbursement requires a journal entry that involves a debit to the appropriate expenses and a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 11

Describe the basic bank services that contribute to the control of cash and identify at least two internal control objectives served by the banking activities.

Accepted Answer

Basic bank services can be organized int...

Question 12

The following information is available for Montrose Company at December 31:
  Cash in bank account $8,540 Petty cash 250 Money market fund balance $10,400 Checks from customers $1,350 NSF checks from customers returned by bank $805 Treasury bill maturing in 60 days $10,000 Money orders $290 A nine-month certificate of deposit maturing on June 30 of next year $6,000\begin{array} { | l | r | } \hline 	ext { Cash in bank account } & \$ 8,540 \\hline 	ext { Petty cash } & 250 \\hline 	ext { Money market fund balance } & \$ 10,400 \\hline 	ext { Checks from customers } & \$ 1,350 \\hline 	ext { NSF checks from customers returned by bank } & \$ 805 \\hline 	ext { Treasury bill maturing in 60 days } & \$ 10,000 \\hline 	ext { Money orders } & \$ 290 \\hline 	ext { A nine-month certificate of deposit maturing on June 30 of next year } & \$ 6,000 \\hline\end{array} Cash in bank account  Petty cash  Money market fund balance  Checks from customers  NSF checks from customers returned by bank  Treasury bill maturing in 60 days  Money orders  A nine-month certificate of deposit maturing on June 30 of next year ​$8,540250$10,400$1,350$805$10,000$290$6,000​​ 
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 $26,400 F) A) and B)
G) A) and C)

Question 13

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) C) and D)
G) A) and D)

Question 14

Internal control in technologically advanced accounting systems depends less on the design and operation of the information system and more on the analysis of its resulting documents.

Accepted Answer

A) True 
 B)False

Question 15

Identify each of the following items 1 through 10 as either (A)cash or (B)cash equivalent.
_____ 1.Coins
_____ 2.Petty cash
_____ 3.Three-month certificate of deposit
_____ 4.Commercial paper
_____ 5.Currency
_____ 6.Certified check
_____ 7.Cashier's check
_____ 8.Money market accounts
_____ 9.Money orders
_____ 10.U.S.treasury bills

Accepted Answer

1.A; 2.A; ...

Question 16

In order to streamline the purchasing process,department managers should place orders directly with suppliers.

Accepted Answer

A) True 
 B)False

Question 17

What is the purpose of the days' sales uncollected ratio?

Accepted Answer

The days' sales uncollected ratio is a l...

Question 18

The clerk who has access to the cash in the cash register should also have access to the cash register tape or file.

Accepted Answer

A) True 
 B)False

Question 19

A company wants to decrease its $200 petty cash fund to $175.The entry to reduce the fund is:

Accepted Answer

A)   Debit Cash Over and Short for $25; credit Petty Cash $25.
B)   Debit to Cash $25; credit Petty Cash $25.
C)   Debit Miscellaneous Expenses $25; credit Cash $25.
D)   Debit Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.
E)   Debit Petty Cash $25; credit Cash $25.F) C) and D)
G) A) and E)

Question 20

Match each of the following terms with the appropriate definitions.
-A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

Accepted Answer

A)  Days' sales uncollected
B)  Gross method
C)  Receiving report
D)  Bank reconciliation
E)  Purchase orderF) Principles of internal controlG) Cash Over and ShortH) LiquidityI) Net methodJ) Voucher systemK) E) and G)
L) B) and D)

Exam 6: Cash, fraud, and Internal Controls

A ________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Correct Answer
verified

Describe the basic bank services that contribute to the control of cash and identify at least two internal control objectives served by the banking activities.

Correct Answer
verified
Basic bank services can be organized int...
View Answer

Petty cash reimbursement requires a journal entry that involves a debit to the appropriate expenses and a credit to Cash.

Correct Answer
verified

Correct Answer
verified

Cash,not including cash equivalents,includes:

Correct Answer
verified

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
verified

The clerk who has access to the cash in the cash register should also have access to the cash register tape or file.

Correct Answer
verified

What is the purpose of the days' sales uncollected ratio?

Correct Answer
verified
The days' sales uncollected ratio is a l...
View Answer

Internal control in technologically advanced accounting systems depends less on the design and operation of the information system and more on the analysis of its resulting documents.

Correct Answer
verified

Match each of the following terms with the appropriate definitions. -A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

Correct Answer
verified

Cash equivalents meet all of the following criteria except:

Correct Answer
verified

At the end of the day,the cash register's record shows $2,050,but the count of cash in the cash register is $2,058.The correct entry to record the cash sales is

Correct Answer
verified

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Correct Answer
verified

Internal control systems are:

Correct Answer
verified

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Correct Answer
verified

A company wants to decrease its $200 petty cash fund to $175.The entry to reduce the fund is:

Correct Answer
verified

In order to streamline the purchasing process,department managers should place orders directly with suppliers.

Correct Answer
verified

Identify each of the following items 1 through 10 as either (A)cash or (B)cash equivalent. ___ 1.Coins _ 2.Petty cash _ 3.Three-month certificate of deposit _ 4.Commercial paper _ 5.Currency _ 6.Certified check _ 7.Cashier's check _ 8.Money market accounts _ 9.Money orders ___ 10.U.S.treasury bills

Correct Answer
verified
1.A; 2.A; ...
View Answer

A check involves 3 parties: a maker who signs the check,a payee who is the recipient,and a bank on which the check is drawn.

Correct Answer
verified

A bank statement provided by the bank includes:

Correct Answer
verified

Exam 6: Cash, fraud, and Internal Controls

A ________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Correct AnswerverifiedShow Answer

Describe the basic bank services that contribute to the control of cash and identify at least two internal control objectives served by the banking activities.

Correct AnswerverifiedBasic bank services can be organized int...View AnswerShow Answer

Petty cash reimbursement requires a journal entry that involves a debit to the appropriate expenses and a credit to Cash.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cash,not including cash equivalents,includes:

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

The clerk who has access to the cash in the cash register should also have access to the cash register tape or file.

Correct AnswerverifiedShow Answer

What is the purpose of the days' sales uncollected ratio?

Correct AnswerverifiedThe days' sales uncollected ratio is a l...View AnswerShow Answer

Internal control in technologically advanced accounting systems depends less on the design and operation of the information system and more on the analysis of its resulting documents.

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -A set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

Correct AnswerverifiedShow Answer

Cash equivalents meet all of the following criteria except:

Correct AnswerverifiedShow Answer

At the end of the day,the cash register's record shows $2,050,but the count of cash in the cash register is $2,058.The correct entry to record the cash sales is

Correct AnswerverifiedShow Answer

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Correct AnswerverifiedShow Answer

Internal control systems are:

Correct AnswerverifiedShow Answer

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Correct AnswerverifiedShow Answer

A company wants to decrease its $200 petty cash fund to $175.The entry to reduce the fund is:

Correct AnswerverifiedShow Answer

In order to streamline the purchasing process,department managers should place orders directly with suppliers.

Correct AnswerverifiedShow Answer

Correct Answerverified1.A; 2.A; ...View AnswerShow Answer

A check involves 3 parties: a maker who signs the check,a payee who is the recipient,and a bank on which the check is drawn.

Correct AnswerverifiedShow Answer

A bank statement provided by the bank includes:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Basic bank services can be organized int...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The days' sales uncollected ratio is a l...
View 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
1.A; 2.A; ...
View Answer

Correct Answer
verified

Correct Answer
verified