Question 1

During a bank reconciliation process,

Accepted Answer

A)   Outstanding checks and deposits in transit are added to the bank statement balance.
B)   Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.
C)   Outstanding checks and deposits in transit are subtracted from the bank statement balance.
D)   Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.E) A) and B)
F) A) and C)

Question 2

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Accepted Answer

A)   an expense on the income statement
B)   income on the income statement
C)   an asset on the balance sheet
D)   a liability on the balance sheetE) None of the above
F) A) and B)

Question 3

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

Accepted Answer

A) True 
 B)False

Question 4

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

Accepted Answer

A)   debit Accounts Payable; credit Cash
B)   debit Cash; credit Accounts Receivable
C)   debit Cash; credit Accounts Payable
D)   debit Accounts Receivable; credit CashE) None of the above
F) A) and B)

Question 5

The following data were gathered to use in reconciling the bank statement of Build-A-Lot:
  Required:
(1) What is the adjusted balance on the bank reconciliation?
(2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Accepted Answer

(1)
$13,155 as shown below.
Ba...

Question 6

A voucher system is an example of an internal control procedure over cash payments.

Accepted Answer

A) True 
 B)False

Question 7

A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account would include a credit to

Accepted Answer

A)   Cash for $20.
B)   Cash Over and Short for $3.
C)   Petty Cash for $120.
D)   Cash for $120.E) A) and B)
F) B) and D)

Question 8

Internal control does not consist of policies and procedures that

Accepted Answer

A)   protect assets from misuse
B)   aid management in directing operations toward achieving business goals
C)   guarantee the company will not go bankrupt
D)   ensure that business information is accurateE) C) and D)
F) B) and D)

Question 9

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

Accepted Answer

A) True 
 B)False

Question 10

Describe the features of a voucher system and list typical supporting documents for a voucher.

Accepted Answer

A voucher system is used to control cash...

Question 11

After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Accepted Answer

A) True 
 B)False

Question 12

A $100 petty cash fund contains $91 in petty cash receipts, and $4.75 in currency and coins. The journal entry to record the replenishment of the fund would include a

Accepted Answer

A)   credit to Petty Cash for $95.75.
B)   credit to Cash for $90.
C)   debit to Cash Short and Over for $4.25.
D)   credit to Cash Short and Over for $4.25.E) A) and B)
F) A) and C)

Question 13

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) C) and D)
F) A) and C)

Question 14

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)   a promissory note left for collection
C)   a service charge
D)   notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticketE) B) and D)
F) B) and C)

Question 15

Peaches, Inc. reported the following data in it's December 31, 2011 annual report:
Cash and cash equivalents $460,000
Cash flow from operations (240,000)
Required:
(1) What is the company's "cash burn" per month?
(2) What is the company's ratio of cash to monthly cash expenses?

Accepted Answer

(1) $240,000/12=$20,...

Question 16

The Scharf Company is a retailer located in a state without sales tax. The following data was given to you to complete the transactions for the day's sales to be recorded. All cash drawers start with $100 in change.
  Record the Journal Entries for EACH cash register to determine the cashier's accuracy.
  First item for the student to remember is that EACH cash drawer starts with $100. This must be subtracted from the total cash in drawer to determine the cash over/short amount.

Accepted Answer

The answer of The Scharf Company is a retailer located...

Question 17

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Accepted Answer

A) True 
 B)False

Question 18

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is

Accepted Answer

A)   a deduction from the balance per company's records
B)   an addition to the balance per bank statement
C)   a deduction from the balance per bank statement
D)   an addition to the balance per company's recordsE) None 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. What entry is required in the company's accounts?

Accepted Answer

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

Question 20

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 B)
F) C) and D)

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

Correct Answer
verified

After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Correct Answer
verified

A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account would include a credit to

Correct Answer
verified

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Correct Answer
verified
(1)
$13,155 as shown below.
Ba...
View Answer

Describe the features of a voucher system and list typical supporting documents for a voucher.

Correct Answer
verified
A voucher system is used to control cash...
View Answer

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

Correct Answer
verified

Peaches, Inc. reported the following data in it's December 31, 2011 annual report: Cash and cash equivalents $460,000 Cash flow from operations (240,000) Required: (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses?

Correct Answer
verified
(1) $240,000/12=$20,...
View Answer

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

Correct Answer
verified

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Correct Answer
verified

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Correct Answer
verified

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is

Correct Answer
verified

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

Correct Answer
verified

Internal control does not consist of policies and procedures that

Correct Answer
verified

A $100 petty cash fund contains $91 in petty cash receipts, and $4.75 in currency and coins. The journal entry to record the replenishment of the fund would include a

Correct Answer
verified

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

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

An example of a preventive control is

Correct Answer
verified

A voucher system is an example of an internal control procedure over cash payments.

Correct Answer
verified

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 Answer
verified

During a bank reconciliation process,

Correct Answer
verified

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

Correct AnswerverifiedShow Answer

After a bank reconciliation is completed, adjusting entries are prepared for items in the balance per company's records as well as items in the balance per bank statement.

Correct AnswerverifiedShow Answer

A $140 petty cash fund has cash of $20 and receipts of $117. The journal entry to replenish the account would include a credit to

Correct AnswerverifiedShow Answer

The following data were gathered to use in reconciling the bank statement of Build-A-Lot: Required: (1) What is the adjusted balance on the bank reconciliation? (2) Journalize any necessary entries for Build-A-Lot based on the bank reconciliation.

Correct Answerverified(1)$13,155 as shown below.Ba...View AnswerShow Answer

Describe the features of a voucher system and list typical supporting documents for a voucher.

Correct AnswerverifiedA voucher system is used to control cash...View AnswerShow Answer

Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting.

Correct AnswerverifiedShow Answer

Peaches, Inc. reported the following data in it's December 31, 2011 annual report: Cash and cash equivalents $460,000 Cash flow from operations (240,000) Required: (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses?

Correct Answerverified(1) $240,000/12=$20,...View AnswerShow Answer

Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?

Correct AnswerverifiedShow Answer

Bank customers are considered creditors of the bank so the bank shows their accounts with credit balances on the bank's records.

Correct AnswerverifiedShow Answer

The debit balance in Cash Short and Over at the end of an accounting period is reported as

Correct AnswerverifiedShow Answer

Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is

Correct AnswerverifiedShow Answer

A remittance advice is the notification accompanying the check issued to a creditor that states the specific invoice being paid.

Correct AnswerverifiedShow Answer

Internal control does not consist of policies and procedures that

Correct AnswerverifiedShow Answer

A $100 petty cash fund contains $91 in petty cash receipts, and $4.75 in currency and coins. The journal entry to record the replenishment of the fund would include a

Correct AnswerverifiedShow Answer

A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?

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

An example of a preventive control is

Correct AnswerverifiedShow Answer

A voucher system is an example of an internal control procedure over cash payments.

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

During a bank reconciliation process,

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
(1)
$13,155 as shown below.
Ba...
View Answer

Correct Answer
verified
A voucher system is used to control cash...
View Answer

Correct Answer
verified

Correct Answer
verified
(1) $240,000/12=$20,...
View Answer

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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Correct Answer
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Correct Answer
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Correct Answer
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