Question 1

Derek Company gathered the following reconciling information in preparing its September bank reconciliation:

Accepted Answer

A)   $5,150. 
B)   $3,710.
C)   $3,060.
D)   $1,610.E) A) and B)
F) B) and C)

Question 2

Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Cash equivalents

Accepted Answer

A)   are illegal in some states
B)   will be converted to cash within two years
C)   will be converted to cash within 90 days
D)   will be converted to cash within 120 daysE) B) and D)
F) A) and B)

Question 4

Which of the following is not an internal control activity for cash?

Accepted Answer

A)   The number of persons who have access to cash should be limited.
B)   All cash receipts should be recorded promptly.
C)   The functions of record keeping and maintaining custody of cash should be combined.
D)   Surprise audits of cash on hand should be made occasionally.E) A) and C)
F) All of the above

Question 5

The following data were gathered to use in reconciling the bank account of Savannah Company:  What is the adjusted balance on the bank reconcilition?

Accepted Answer

A)   $14,470
B)   $10,705
C)   $15,095
D)   $15,720E) A) and C)
F) A) and B)

Question 6

A petty cash fund is used to pay relatively large amounts.

Accepted Answer

A) True 
 B)False

Question 7

The amount of cash to be reported on the balance sheet at June 30 is the

Accepted Answer

A)   total of the cash column in the cash receipts journal as of June 30
B)   adjusted balance appearing in the bank reconciliation for June 30
C)   total of the cash column in the cash payments journal as of June 30
D)   balance as of June 30 on the bank statementE) B) and D)
F) A) and C)

Question 8

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) C) and D)

Question 9

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) None of the above
F) A) and B)

Question 10

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Accepted Answer

A) True 
 B)False

Question 11

The following information is from Madison Corporation's accounting records for May 20XX. Check # 3269 was returned as a double payment and voided. Checks that have not cleared the bank include 3252, 3260, and series 3275-3278.
  In addition to the above list of the checks, Madison had check #2264 for $32.98 and check #2655 for $45.99 outstanding previously that have not cleared.
1. Create an outstanding checks list for Madison at the end of May 20XX.
2. What is the total amount of checks that cleared the bank (written in May)?

Accepted Answer

1.

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Question 12

An example of a preventive control is

Accepted Answer

A)   a single person handles the responsibilities for operations, custody of assets, and accounting
B)   separation of the Purchasing Department and Accounting Department personnel
C)   bonding employees who handle cash
D)   accepting payment in currency onlyE) All of the above
F) B) and C)

Question 13

The bank reconciles its statement to the company's records.

Accepted Answer

A) True 
 B)False

Question 14

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   addition to the balance per the company's records
B)   addition to the balance per the bank statement
C)   deduction from the balance per the bank statement
D)   deduction from the balance per the company's recordsE) B) and C)
F) All of the above

Question 15

Entries are made to the Petty Cash account when

Accepted Answer

A)   making payments out of the fund.
B)   recording shortages in the fund.
C)   replenishing the petty cash fund.
D)   establishing the fund.E) B) and C)
F) A) and D)

Question 16

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

Accepted Answer

A) True 
 B)False

Question 17

On August 3rd, Sonar Sales decides to establish a $275.00 Petty Cash Account to relieve the burden on Accounting.
(a) Journalize this event.
(b) On August 11th, the petty cash fund has receipts for mail and postage of $124.75, contributions and donations of $53.25, meals and entertainment of $63.85 and $32.75 in cash. Journalize the replenishment of the fund.
(c) On August 12th, Sonar Sales decides to increase petty cash to $400.00. Journalize this event.

Accepted Answer

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Question 18

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) All of the above
F) A) and D)

Question 19

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)

Accepted Answer

A)   deduction from the balance per company's records
B)   addition to the balance per bank statement
C)   deduction from the balance per bank statement
D)   addition to the balance per company's recordsE) A) and C)
F) None of the above

Question 20

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

Accepted Answer

A)   debit Notes Receivable; credit Cash
B)   debit Cash; credit Miscellaneous Income
C)   debit Cash; credit Notes Receivable
D)   debit Accounts Receivable; credit CashE) A) and B)
F) A) and C)

Exam 8: Sarbanes-Oxley, Internal Control, and Cash

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

Correct Answer
verified

The bank reconciles its statement to the company's records.

Correct Answer
verified

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

Correct Answer
verified

Cash equivalents

Correct Answer
verified

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Correct Answer
verified

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)

Correct Answer
verified

A bank reconciliation should be prepared periodically because

Correct Answer
verified

An example of a preventive control is

Correct Answer
verified

Correct Answer
verified
1.
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2. S...
View Answer

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Correct Answer
verified

Derek Company gathered the following reconciling information in preparing its September bank reconciliation:

Correct Answer
verified

The amount of cash to be reported on the balance sheet at June 30 is the

Correct Answer
verified

Which of the following is not an internal control activity for cash?

Correct Answer
verified

A petty cash fund is used to pay relatively large amounts.

Correct Answer
verified

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

Correct Answer
verified

Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately on the balance sheet.

Correct Answer
verified

Entries are made to the Petty Cash account when

Correct Answer
verified

Correct Answer
verified
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View Answer

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Correct Answer
verified

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

Correct Answer
verified

Exam 8: Sarbanes-Oxley, Internal Control, and Cash

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the customer. What entry is required in the company's accounts?

Correct AnswerverifiedShow Answer

The bank reconciles its statement to the company's records.

Correct AnswerverifiedShow Answer

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

Correct AnswerverifiedShow Answer

Cash equivalents

Correct AnswerverifiedShow Answer

The following data were gathered to use in reconciling the bank account of Savannah Company: What is the adjusted balance on the bank reconcilition?

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a debit memo for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

A bank reconciliation should be prepared periodically because

Correct AnswerverifiedShow Answer

An example of a preventive control is

Correct AnswerverifiedShow Answer

Correct Answerverified1. _TB2085_00_TB2085_00 2. S...View AnswerShow Answer

Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

Derek Company gathered the following reconciling information in preparing its September bank reconciliation:

Correct AnswerverifiedShow Answer

The amount of cash to be reported on the balance sheet at June 30 is the

Correct AnswerverifiedShow Answer

Which of the following is not an internal control activity for cash?

Correct AnswerverifiedShow Answer

A petty cash fund is used to pay relatively large amounts.

Correct AnswerverifiedShow Answer

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n)

Correct AnswerverifiedShow Answer

Most companies who have several bank accounts, petty cash, and cash on hand, would list each separately on the balance sheet.

Correct AnswerverifiedShow Answer

Entries are made to the Petty Cash account when

Correct AnswerverifiedShow Answer

Correct Answerverified_TB2085_00...View AnswerShow Answer

A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)

Correct AnswerverifiedShow Answer

Correct Answer
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