Question 1

Depositing all cash,checks,etc.,in a bank and paying with checks is an internal control procedure over cash.

Accepted Answer

A) True 
 B)False

Question 2

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Deposit in transit

Accepted Answer

A)  Bank statement adjustment
B)  Company books adjustment
C)  EitherD) None of the above
E) All of the above

Question 3

The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales.​Journal

Accepted Answer

The answer of The actual cash received during the week...

Question 4

Which of the following should not be considered cash by an accountant?

Accepted Answer

A)  money orders
B)  bank checking accounts
C)  postage stamps
D)  travelers' checksE) B) and C)
F) A) and D)

Question 5

During the year,Tempo Inc.has monthly cash expenses of $115,000.On December 31,its cash balance is $1,437,500.The ratio of cash to monthly cash expenses is

Accepted Answer

A)  8.0 months
B)  12.5 months
C)  87.5 months
D)  11.5 monthsE) B) and C)
F) A) and D)

Question 6

Money orders are considered cash.

Accepted Answer

A) True 
 B)False

Question 7

A bank reconciliation should be prepared periodically because

Accepted Answer

A)  the company's records and the bank's records are in agreement
B)  the bank has not recorded all of its transactions
C)  any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected
D)  the bank must make sure that its records are correctE) All of the above
F) A) and D)

Question 8

Journalize the entries to record the following:​​  Journal

Accepted Answer

The answer of Journalize the entries to record the following:​​...

Question 9

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 10

Match the following elements of internal control:
-Monitoring

Accepted Answer

A)  Provides reasonable assurance that business goals will be achieved
B)  Used by management for guiding operations and ensuring compliance with requirements
C)  Overall attitude of management and employees
D)  Used to locate weaknesses and improve controls
E)  Identify, analyze, and assess likeliness of vulnerabilitiesF) C) and D)
G) A) and E)

Question 11

Sarbanes-Oxley requires sole proprietorships to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements.

Accepted Answer

A) True 
 B)False

Question 12

A necessary element of internal control is

Accepted Answer

A)  a database
B)  systems design
C)  systems analysis
D)  information and communicationE) B) and C)
F) A) and D)

Question 13

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement.An example of a credit memo is

Accepted Answer

A)  deposited checks returned for insufficient funds
B)  collection of a promissory note
C)  a service charge
D)  notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticketE) C) and D)
F) A) and B)

Question 14

Accompanying the bank statement was a debit memo for bank service charges.What entry is required in the company's accounts?

Accepted Answer

A)  debit Miscellaneous Administrative Expense; credit Cash
B)  debit Cash; credit Other Income
C)  debit Cash; credit Accounts Payable
D)  debit Accounts Payable; credit CashE) A) and B)
F) A) and D)

Question 15

The type of account and normal balance of Petty Cash is a (n)

Accepted Answer

A)  revenue, credit
B)  asset, debit
C)  liability, credit
D)  expense, debitE) A) and B)
F) A) and C)

Question 16

Garden Gate,Inc.reported the following data in its August 31 annual report.Required
(a)What is the company's "cash burn" per month?
(b)What is the company's ratio of cash to monthly cash expenses?
(c)Interpret the ratio you computed in part
b. What are the implications for Garden Gate, Inc.?

Accepted Answer

(a)$630,000/12 = $52,500 per month
(b)$...

Question 17

When the voucher system is used,the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Accepted Answer

A) True 
 B)False

Question 18

A bank reconciliation should be prepared

Accepted Answer

A)  whenever the bank refuses to lend the company money
B)  to explain any difference between the company's balance per books with the balance per bank
C)  by the company's bank
D)  by the person who is authorized to sign checksE) A) and B)
F) A) and C)

Question 19

Journalize the entries to record the following:​​  Journal

Accepted Answer

The answer of Journalize the entries to record the following:​​...

Question 20

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance.Complete the following table to help your new staff understand.

Accepted Answer

The answer of You are trying to explain debit and...

Exam 8: Internal Control and Cash

Which of the following should not be considered cash by an accountant?

Correct AnswerverifiedShow Answer

Depositing all cash,checks,etc.,in a bank and paying with checks is an internal control procedure over cash.

Correct AnswerverifiedShow Answer

Sarbanes-Oxley requires sole proprietorships to maintain strong and effective internal controls and thus deter fraud and prevent misleading financial statements.

Correct AnswerverifiedShow Answer

Garden Gate,Inc.reported the following data in its August 31 annual report.Required (a)What is the company's "cash burn" per month? (b)What is the company's ratio of cash to monthly cash expenses? (c)Interpret the ratio you computed in part b. What are the implications for Garden Gate, Inc.?

Correct Answerverified(a)$630,000/12 = $52,500 per month​(b)$...View AnswerShow Answer

Match each item to a bank statement adjustment, a company books adjustment, or either. -Deposit in transit

Correct AnswerverifiedShow Answer

A bank reconciliation should be prepared periodically because

Correct AnswerverifiedShow Answer

A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement.An example of a credit memo is

Correct AnswerverifiedShow Answer

The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales.​Journal

Correct AnswerverifiedShow Answer

Journalize the entries to record the following:​​ Journal

Correct AnswerverifiedShow Answer

A necessary element of internal control is

Correct AnswerverifiedShow Answer

The type of account and normal balance of Petty Cash is a (n)

Correct AnswerverifiedShow Answer

Journalize the entries to record the following:​​ Journal

Correct AnswerverifiedShow Answer

Match the following elements of internal control: -Monitoring

Correct AnswerverifiedShow Answer

Money orders are considered cash.

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation,the amount of deposits in transit is deducted from the balance per bank statement.

Correct AnswerverifiedShow Answer

During the year,Tempo Inc.has monthly cash expenses of $115,000.On December 31,its cash balance is $1,437,500.The ratio of cash to monthly cash expenses is

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a debit memo for bank service charges.What entry is required in the company's accounts?

Correct AnswerverifiedShow Answer

A bank reconciliation should be prepared

Correct AnswerverifiedShow Answer

When the voucher system is used,the amount due on each voucher represents the credit balance of an account payable if the voucher is in full payment to a creditor.

Correct AnswerverifiedShow Answer

You are trying to explain debit and credit memos that appear on bank statements and whether these will increase or decrease your company's bank account balance.Complete the following table to help your new staff understand.

Correct AnswerverifiedShow Answer

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(a)$630,000/12 = $52,500 per month
(b)$...
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The actual cash received during the week ended June 7 for cash sales was $18,632,and the amount indicated by the cash register total was $18,628.Journalize the entry to record the cash receipts and cash sales.Journal

Correct Answer
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Journalize the entries to record the following: Journal

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Journalize the entries to record the following: Journal

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