Question 1

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Accepted Answer

A)  Vendor.
B)  Payee.
C)  Vendee.
D)  Creditor.
E)  Debtor.

Question 2

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Accepted Answer

A) True 
 B)False

Question 3

For which item does a bank NOT issue a debit memorandum?

Accepted Answer

A)  To notify a depositor of all withdrawals through an ATM.
B)  To notify a depositor of a deduction to a depositor's account.
C)  To notify a depositor of a bounced check.
D)  To notify a depositor of periodic payments arranged in advance,by a depositor.
E)  To notify a depositor of a deposit to their account.

Question 4

Which of the following procedures would weaken the 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 should not also be the record keeper who records the amounts received in the accounting records.
E)  All of the above are good internal control procedures over cash receipts that arrive through the mail.

Question 5

Discuss the purpose of a bank reconciliation.

Accepted Answer

A bank reconciliation is a report explai...

Question 6

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

Accepted Answer

A) True 
 B)False

Question 7

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Accepted Answer

The answer of The document the purchasing department sends to...

Question 8

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Accepted Answer

A)  Cash Lost account.
B)  Bank Reconciliation account.
C)  Petty Cash account.
D)  Cash Over and Short account.
E)  Cash Receivable account.

Question 9

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 10

The impact of technology on internal controls includes which of the following?

Accepted Answer

A)  Reduced processing errors.
B)  Elimination of the need for regular audits.
C)  Elimination of the need to bond employees.
D)  More efficient separation of duties.
E)  Elimination of fraud.

Question 11

The number of days' sales uncollected is calculated by:

Accepted Answer

A)  Dividing accounts receivable by net sales.
B)  Dividing accounts receivable by net sales and then multiplying by 365.
C)  Dividing net sales by accounts receivable.
D)  Dividing net sales by accounts receivable and then multiplying by 365.
E)  Multiplying net sales by accounts receivable and dividing the result by 365.

Question 12

Highlight Hotel deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on December 31, its Cash account shows a $18,393, debit balance. Highlight Hotel's June 30 bank statement shows $15,921 on deposit in the bank. Prepare a bank reconciliation for Highlight Hotel using the following information:
1.Outstanding checks as of December 31 total $2,261.
2.The December 31 bank statement included a $35 debit memorandum for bank services.
3.Check No. 2519, listed with the canceled checks, was correctly drawn for $850 in payment of a utility bill on December 16. Highlight Hotel mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $805.
4.The December 31 cash receipts of $3,425 were placed in the bank’s night depository after banking hours and did not appear on the December 31 bank statement.
5.The bank statement included a check from a customer’s payment of an account receivable that had been returned NSF in the amount of $1,228.
Prepare the bank reconciliation for December 31.

Accepted Answer

The answer of Highlight Hotel deposits all cash receipts on...

Question 13

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

A) True 
 B)False

Question 14

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

Accepted Answer

A) True 
 B)False

Question 15

Cash equivalents:

Accepted Answer

A)  Are short-term,highly liquid investments.
B)  Include six-month CDs.
C)  Include checking accounts.
D)  Are recorded in petty cash.
E)  Include money orders.

Question 16

A company wrote a check 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 check from the bank statement balance.
B)  Send the bank a credit memorandum.
C)  Deduct the check from the September 30 book balance and add it to the October 1 book balance.
D)  Add the check to the book balance of cash.
E)  Add the check to the bank statement balance.

Question 17

Discuss how the principles of internal control apply to cash receipts.

Accepted Answer

Internal control principles as applied t...

Question 18

The main principles of internal control include which of the following:

Accepted Answer

A)  Establish responsibilities.
B)  Maintain minimal records.
C)  Use only computerized systems.
D)  Bond all employees.
E)  Require automated sales systems.

Question 19

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 20

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Accepted Answer

A) True 
 B)False

Exam 6: Reporting and Analyzing Cash and Internal Controls

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Correct Answer
verified

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

Correct Answer
verified

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Correct Answer
verified

Discuss the purpose of a bank reconciliation.

Correct Answer
verified
A bank reconciliation is a report explai...
View Answer

The number of days' sales uncollected is calculated by:

Correct Answer
verified

Discuss how the principles of internal control apply to cash receipts.

Correct Answer
verified
Internal control principles as applied t...
View Answer

Cash equivalents:

Correct Answer
verified

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Correct Answer
verified

The impact of technology on internal controls includes which of the following?

Correct Answer
verified

For which item does a bank NOT issue a debit memorandum?

Correct Answer
verified

The main principles of internal control include which of the following:

Correct Answer
verified

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

Correct Answer
verified

A company wrote a check 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

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Correct Answer
verified

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

Correct Answer
verified

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Correct Answer
verified

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct Answer
verified

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Correct Answer
verified

Correct Answer
verified

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Correct Answer
verified

Exam 6: Reporting and Analyzing Cash and Internal Controls

The document the purchasing department sends to the vendor that is used to place an order is the __________________________.

Correct AnswerverifiedShow Answer

Controls of cash disbursements are important for companies as most large thefts occur from payment of fictitious invoices.

Correct AnswerverifiedShow Answer

If the Cash Over and Short account has a debit balance at the end of the period,the amount is reported as miscellaneous revenue.

Correct AnswerverifiedShow Answer

Discuss the purpose of a bank reconciliation.

Correct AnswerverifiedA bank reconciliation is a report explai...View AnswerShow Answer

The number of days' sales uncollected is calculated by:

Correct AnswerverifiedShow Answer

Discuss how the principles of internal control apply to cash receipts.

Correct AnswerverifiedInternal control principles as applied t...View AnswerShow Answer

Cash equivalents:

Correct AnswerverifiedShow Answer

An income statement account that is used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is called the:

Correct AnswerverifiedShow Answer

The impact of technology on internal controls includes which of the following?

Correct AnswerverifiedShow Answer

For which item does a bank NOT issue a debit memorandum?

Correct AnswerverifiedShow Answer

The main principles of internal control include which of the following:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A company wrote a check 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

Canceled checks are a way to confirm what the bank has paid and deducted from the customer's account during the period.

Correct AnswerverifiedShow Answer

A voucher system establishes procedures for verifying,approving,and recording obligations for eventual cash disbursement.

Correct AnswerverifiedShow Answer

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Correct AnswerverifiedShow Answer

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct AnswerverifiedShow Answer

Technology such as cash registers,check protectors,time clocks,and personal identification scanners can increase the strength of internal controls.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A seller of goods or services,which is usually a manufacturer or wholesaler,is known as a:

Correct AnswerverifiedShow Answer

Correct Answer
verified

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Correct Answer
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Correct Answer
verified
A bank reconciliation is a report explai...
View Answer

Correct Answer
verified

Correct Answer
verified
Internal control principles as applied t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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