Question 1

A remittance advice is a(n) :

Accepted Answer

A)  Explanation for a payment that accompanies a check.
B)  Symbol on the bank statement.
C)  Internal voucher.
D)  Electronic funds transfer.
E)  Cancelled check.F) B) and E)
G) C) and D)

Question 2

An internal control system consists of the policies and procedures used to accomplish all of the following except:

Accepted Answer

A)  Protect assets.
B)  Ensure reliable accounting.
C)  Guarantee a return to investors.
D)  Urge adherence to company policies.
E)  Promote efficient operations.F) B) and C)
G) C) and D)

Question 3

A company had $43 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure when reimbursing the fund is to:

Accepted Answer

A)  Debit Cash Over and Short for $43.
B)  Credit Cash Over and Short for $43.
C)  Debit Petty Cash for $43.
D)  Credit Petty Cash for $43.
E)  Credit Cash for $43.F) A) and C)
G) A) and B)

Question 4

Basic bank services do not include:

Accepted Answer

A)  Bank accounts.
B)  Bank deposits.
C)  Checking.
D)  Electronic funds transfer.
E)  Petty cash management.F) A) and D)
G) C) and D)

Question 5

The document that the purchasing department prepares and sends to the vendor to place an order is called the

Accepted Answer

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

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

Question 7

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) A) and B)
G) C) and E)

Question 8

Effective cash management includes making efforts to pay bills on the earliest possible day.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

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

Question 10

Maintaining adequate records is an important internal control principle.

Accepted Answer

A) True 
 B)False

Question 11

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Accepted Answer

A) True 
 B)False

Question 12

A properly designed internal control system is a key part of systems design, analysis, and performance.

Accepted Answer

A) True 
 B)False

Question 13

Havermill Co. establishes a $250 petty cash fund on September 1. On September 30, the fund is reimbursed. The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the reimbursement of the fund on September 30 includes a:

Accepted Answer

A)  Debit to Office Supplies for $73.
B)  Credit to Merchandise Inventory for $137.
C)  Credit to Cash for $250.
D)  Debit Petty Cash for $232.
E)  Credit to Cash for $18.F) A) and C)
G) B) and D)

Question 14

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) C) and D)

Question 15

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

Accepted Answer

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

Question 16

The number of days' sales uncollected:

Accepted Answer

A)  Is used to evaluate the liquidity of receivables.
B)  Is calculated by dividing accounts receivable by sales.
C)  Measures a company's ability to pay its bills on time.
D)  Measures a company's debt to income.
E)  Is calculated by dividing sales by accounts receivable.F) B) and D)
G) A) and E)

Question 17

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 multiplying by 365.
C)  Dividing net sales by accounts receivable.
D)  Dividing net sales by accounts receivable and multiplying by 365.
E)  Multiplying net sales by accounts receivable and dividing by 365.F) A) and C)
G) B) and E)

Question 18

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 D)

Question 19

The voucher system of control:

Accepted Answer

A)  Is a set of procedures and approvals designed to control cash receipts and the acceptance of obligations.
B)  Establishes procedures for verifying, approving, and recording obligations for eventual cash disbursement.
C)  Establishes procedures for receiving checks for the sale of verified, approved, and recorded activities.
D)  Applies only when multiple purchases are made from the same supplier.
E)  Is required in large companies but not beneficial for small to mid-sized companies.F) A) and E)
G) A) and D)

Question 20

The following information is available for the Savvy Company for the month of June.
a. On June 30, after all transactions have been recorded, the balance in the company's Cash account has a balance of $17,202.
b. The company's bank statement shows a balance on June 30 of $19,279.
c. Outstanding checks at June 30 total $2,984.
d. A credit memo included with the bank statement indicates that the bank collected $770 on a noninterest-bearing note receivable for Savvy.
e. A debit memo included with the bank statement shows a $67 NSF check from a customer, J. Maroon.
f. A deposit placed in the bank's night depository on June 30 totaling $1,675 did not appear on the bank statement.
g. Comparing the checks on the bank statement with the entries in the accounting records reveals that check #3445 for the payment of an account payable was correctly written for $2,450, but was recorded in the accounting records as $2,540.
h. Included with the bank statement was a debit memorandum in the amount of $25 for bank service charges. It has not been recorded on the company's books.
1. Prepare the June bank reconciliation for the Savvy Company.
2. Prepare the general journal entries to bring the company's book balance of cash into conformity with the reconciled balance as of June 30.

Accepted Answer

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

Exam 6: Reporting and Analyzing Cash and Internal Controls

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

Correct Answer
verified

The document that the purchasing department prepares and sends to the vendor to place an order is called the

Correct Answer
verified

Basic bank services do not include:

Correct Answer
verified

The principles of internal control include:

Correct Answer
verified

An internal control system consists of the policies and procedures used to accomplish all of the following except:

Correct Answer
verified

A properly designed internal control system is a key part of systems design, analysis, and performance.

Correct Answer
verified

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Correct Answer
verified

A bank statement provided by the bank includes:

Correct Answer
verified

The voucher system of control:

Correct Answer
verified

Correct Answer
verified

The number of days' sales uncollected:

Correct Answer
verified

A remittance advice is a(n) :

Correct Answer
verified

The number of days' sales uncollected is calculated by:

Correct Answer
verified

Correct Answer
verified

Maintaining adequate records is an important internal control principle.

Correct Answer
verified

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

Correct Answer
verified

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
verified

A company had $43 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure when reimbursing the fund is to:

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

Effective cash management includes making efforts to pay bills on the earliest possible day.

Correct Answer
verified

Exam 6: Reporting and Analyzing Cash and Internal Controls

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

Correct AnswerverifiedShow Answer

The document that the purchasing department prepares and sends to the vendor to place an order is called the

Correct AnswerverifiedShow Answer

Basic bank services do not include:

Correct AnswerverifiedShow Answer

The principles of internal control include:

Correct AnswerverifiedShow Answer

An internal control system consists of the policies and procedures used to accomplish all of the following except:

Correct AnswerverifiedShow Answer

A properly designed internal control system is a key part of systems design, analysis, and performance.

Correct AnswerverifiedShow Answer

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Correct AnswerverifiedShow Answer

A bank statement provided by the bank includes:

Correct AnswerverifiedShow Answer

The voucher system of control:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The number of days' sales uncollected:

Correct AnswerverifiedShow Answer

A remittance advice is a(n) :

Correct AnswerverifiedShow Answer

The number of days' sales uncollected is calculated by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Maintaining adequate records is an important internal control principle.

Correct AnswerverifiedShow Answer

An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:

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

A company had $43 missing from petty cash that was not accounted for by petty cash receipts. The correct procedure when reimbursing the fund is to:

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

Effective cash management includes making efforts to pay bills on the earliest possible day.

Correct AnswerverifiedShow Answer

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