Question 1

The days' sales uncollected ratio measures the liquidity of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 2

Meng Co. establishes a $250 petty cash fund on January 1. On January 8, the fund shows $68 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; and miscellaneous expenses, $59. Meng uses the perpetual system in accounting for merchandise inventory. The journal entry to establish the fund on January 1 is:

Accepted Answer

A)  Debit Cash $250; credit Petty Cash $250.
B)  Debit Petty Cash $250; credit Petty Cash Payable $250.
C)  Debit Miscellaneous Expenses $250; credit Petty Cash $250.
D)  Debit Petty Cash for $250; credit Cash $250.
E)  Debit Petty Cash $250; credit Miscellaneous Expenses $250.F) A) and D)
G) B) and C)

Question 3

Clayborn Company' bank reconciliation as of May 31 is shown below  The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Accepted Answer

A)  A debit to Cash of $625
B)  A debit to Cash of $5,200
C)  A credit to Cash of $4,600
D)  A credit to Cash of $600
E)  A credit to cash of $25F) C) and D)
G) A) and B)

Question 4

Cash equivalents meet all of the following criteria except:

Accepted Answer

A)  Are readily convertible to a known cash amount.
B)  Include short-term investments purchased within 3 months of their maturity dates.
C)  Have a market value that is not sensitive to interest rate changes.
D)  Include short-term U.S.treasury bills.
E)  Are more liquid than cash.F) A) and D)
G) B) and C)

Question 5

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

Accepted Answer

A) True 
 B)False

Question 6

Outstanding checks are checks the bank has paid and deducted from the customer's account during the month.

Accepted Answer

A) True 
 B)False

Question 7

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 establishment of the fund on September 1 is:

Accepted Answer

A)  Debit Cash $250; credit Petty Cash $250.
B)  Debit Petty Cash $250; credit Accounts Payable $250.
C)  Debit Miscellaneous Expense $250; credit Cash $250.
D)  Debit Petty Cash $250; credit Cash $250.
E)  Debit Cash $250; credit Accounts Payable $250.F) A) and B)
G) A) and E)

Question 8

A __________________________ is a document explaining the payment of a check.

Accepted Answer

The answer of A __________________________ is a document explaining the...

Question 9

The limitations of internal control policies and procedures do not include:

Accepted Answer

A)  Human error.
B)  Human fraud.
C)  Cost-benefit principle.
D)  Collusion.
E)  Establishing responsibilities.F) C) and D)
G) All of the above

Question 10

The itemized statement of goods, prepared by a vendor and sent to the buyer, listing the customer's name, items sold, sales prices, and terms of the sale is called the

Accepted Answer

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

Question 11

Internal control systems are:

Accepted Answer

A)  Developed by the Securities and Exchange Commission for public companies.
B)  Developed by the Small Business Administration for non-public companies.
C)  Developed by the Internal Revenue Service for all U.S.companies.
D)  Required by Sarbanes-Oxley (SOX)  to be documented and certified if the company's stock is traded on an exchange.
E)  Required only if a company plans to engage in interstate commerce.F) A) and B)
G) A) and C)

Question 12

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Accepted Answer

A) True 
 B)False

Question 13

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Accepted Answer

A) True 
 B)False

Question 14

Discuss how the principles of internal control apply to cash receipts over-the-counter by giving several examples of good control measures that should be implemented.

Accepted Answer

Internal control principles as applied t...

Question 15

Outstanding checks, deposits in transit, deductions for bank fees, additions for interest, and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Accepted Answer

A) True 
 B)False

Exam 6: Reporting and Analyzing Cash and Internal Controls

Outstanding checks are checks the bank has paid and deducted from the customer's account during the month.

Correct Answer
verified

Correct Answer
verified

Outstanding checks, deposits in transit, deductions for bank fees, additions for interest, and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Correct Answer
verified

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Correct Answer
verified

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Correct Answer
verified

The limitations of internal control policies and procedures do not include:

Correct Answer
verified

Discuss how the principles of internal control apply to cash receipts over-the-counter by giving several examples of good control measures that should be implemented.

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

Cash equivalents meet all of the following criteria except:

Correct Answer
verified

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

Correct Answer
verified

A __________________________ is a document explaining the payment of a check.

Correct Answer
verified

The itemized statement of goods, prepared by a vendor and sent to the buyer, listing the customer's name, items sold, sales prices, and terms of the sale is called the

Correct Answer
verified

The days' sales uncollected ratio measures the liquidity of accounts receivable.

Correct Answer
verified

Correct Answer
verified

Clayborn Company' bank reconciliation as of May 31 is shown below The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct Answer
verified

Internal control systems are:

Correct Answer
verified

Exam 6: Reporting and Analyzing Cash and Internal Controls

Outstanding checks are checks the bank has paid and deducted from the customer's account during the month.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Outstanding checks, deposits in transit, deductions for bank fees, additions for interest, and errors are all factors that can cause the bank statement balance for a checking account to be different from the company's checking account balance.

Correct AnswerverifiedShow Answer

A bank reconciliation explains any differences between the balance of a checking account on the depositor's records and the balance reported on the bank statement.

Correct AnswerverifiedShow Answer

A voucher is an external document used to accumulate information to control cash disbursements and to ensure that a transaction is properly recorded.

Correct AnswerverifiedShow Answer

The limitations of internal control policies and procedures do not include:

Correct AnswerverifiedShow Answer

Discuss how the principles of internal control apply to cash receipts over-the-counter by giving several examples of good control measures that should be implemented.

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

Cash equivalents meet all of the following criteria except:

Correct AnswerverifiedShow Answer

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

Correct AnswerverifiedShow Answer

A __________________________ is a document explaining the payment of a check.

Correct AnswerverifiedShow Answer

The itemized statement of goods, prepared by a vendor and sent to the buyer, listing the customer's name, items sold, sales prices, and terms of the sale is called the

Correct AnswerverifiedShow Answer

The days' sales uncollected ratio measures the liquidity of accounts receivable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Clayborn Company' bank reconciliation as of May 31 is shown below The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct AnswerverifiedShow Answer

Internal control systems are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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