Question 1

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Accepted Answer

A) True 
 B)False

Question 2

Cash receipts are the result of:

Accepted Answer

A)  Collection of accounts payable.
B)  Collection of accounts receivable.
C)  Cash sales.
D)  Cash disbursements.
E)  Cash sales and collection of accounts receivable.F) B) and E)
G) A) and B)

Question 3

Managers place a high priority on internal control systems because the systems assist managers in the:

Accepted Answer

A)  Planning of operations.
B)  Monitoring of employee performance.
C)  Prevention of avoidable losses.
D)  Monitoring of company performance.
E)  All of these answers are correct.F) B) and E)
G) B) and D)

Question 4

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Accepted Answer

A) True 
 B)False

Question 5

MainCo Company's accounting policies require the company to maintain a petty cashbalance of $235. MainCo's junior accountant reviews the content of the petty cash box at June 30 to find receipts for purchases of office supplies of $40, shipping supplies of $30 and a left over balance in cash of $7.50.What entry would you make to replenish the petty cash fund at June 30?

Accepted Answer

A)   
B)   
C)   
D)   
E)  F) A) and B)
G) A) and C)

Question 6

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

Accepted Answer

A) True 
 B)False

Question 7

The Cash Over and Short account:

Accepted Answer

A)  Is not necessary in a computerized accounting system.
B)  Is used to record a credit balance in the cash account.
C)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts.
D)  Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system.
E)  None of these answers is correct.F) A) and E)
G) A) and B)

Question 8

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Accepted Answer

A) True 
 B)False

Question 9

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

Accepted Answer

A) True 
 B)False

Question 10

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

Accepted Answer

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

Question 11

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash consists of cash on hand and demand...

Question 12

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

Accepted Answer

A) True 
 B)False

Question 13

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Accepted Answer

A)  Debit Cash for $62.
B)  Debit Cash Over and Short for $62.
C)  Credit Cash Over and Short for $62.
D)  Credit Cash for $62.
E)  Debit Petty Cash for $62.F) A) and C)
G) A) and E)

Question 14

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Accepted Answer

A) True 
 B)False

Question 15

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Accepted Answer

A) True 
 B)False

Question 16

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Accepted Answer

A) True 
 B)False

Question 17

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Accepted Answer

A) True 
 B)False

Question 18

What is the main motivation for retailers to accept credit cards or debit cards?

Accepted Answer

The retailer hopes to increase...

Question 19

Principles of internal control include:

Accepted Answer

A)  Divide responsibilities for related transactions.
B)  Perform regular and independent reviews.
C)  Record purchases using the gross method.
D)  Divide responsibilities for related transactions and perform regular and independent reviews.
E)  All of these answers are correct.F) C) and D)
G) None of the above

Question 20

A cheque:

Accepted Answer

A)  Involves the maker, the payee, and the bank.
B)  Involves the writer, the signers, the casher, and the bank.
C)  Involves the bookkeeper, the payee, and the bank.
D)  Involves the maker and the payee.
E)  Involves the signer, the casher, and the company.F) All of the above
G) A) and D)

Exam 7: Internal Control and Cash

Cash receipts are the result of:

Correct Answer
verified

What is the main motivation for retailers to accept credit cards or debit cards?

Correct Answer
verified
The retailer hopes to increase...
View Answer

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Correct Answer
verified

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

Correct Answer
verified

Correct Answer
verified

Managers place a high priority on internal control systems because the systems assist managers in the:

Correct Answer
verified

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Correct Answer
verified

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Correct Answer
verified

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

Correct Answer
verified

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Correct Answer
verified

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Correct Answer
verified

The Cash Over and Short account:

Correct Answer
verified

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Correct Answer
verified

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Correct Answer
verified

Principles of internal control include:

Correct Answer
verified

Explain the difference between cash and cash equivalents.

Correct Answer
verified
Cash consists of cash on hand and demand...
View Answer

A cheque:

Correct Answer
verified

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

Correct Answer
verified

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Correct Answer
verified

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

Correct Answer
verified

Exam 7: Internal Control and Cash

Cash receipts are the result of:

Correct AnswerverifiedShow Answer

What is the main motivation for retailers to accept credit cards or debit cards?

Correct AnswerverifiedThe retailer hopes to increase...View AnswerShow Answer

An internal control system is comprised of the policies and procedures companies use to protect assets, ensure reliable accounting, and promote efficient operations.

Correct AnswerverifiedShow Answer

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques, deposits in transit, deductions for bank fees, additions for interest, and errors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Managers place a high priority on internal control systems because the systems assist managers in the:

Correct AnswerverifiedShow Answer

Firms have the option of recording credit card expense as a discount from sales or as a selling expense.

Correct AnswerverifiedShow Answer

Video Buster had $62 in extra cash in the petty cash box at the end of the day. The correct procedure is:

Correct AnswerverifiedShow Answer

A cheque involves three parties: the maker, who signs the cheque, the payee, who is the recipient, and the bank, on which the cheque is drawn.

Correct AnswerverifiedShow Answer

It is not necessary for businesses to reconcile their chequing accounts since banks keep accurate records and provide internal control support for cash.

Correct AnswerverifiedShow Answer

Cash consists of cash on hand and demand deposits. This includes coins, currency, and amounts on deposits in bank accounts, chequing accounts and some savings accounts.

Correct AnswerverifiedShow Answer

The Cash Over and Short account:

Correct AnswerverifiedShow Answer

Basic services provided by banks such as bank accounts, deposit slips and cheques contribute to the control and safeguarding of cash.

Correct AnswerverifiedShow Answer

Separation of duties divides responsibility for a series of transactions between two or more employees or departments. Despite the increased complexity, separation of duties reduces the risk of error and fraud.

Correct AnswerverifiedShow Answer

Principles of internal control include:

Correct AnswerverifiedShow Answer

Explain the difference between cash and cash equivalents.

Correct AnswerverifiedCash consists of cash on hand and demand...View AnswerShow Answer

A cheque:

Correct AnswerverifiedShow Answer

The principles of internal control include: ensure transactions and activities are authorized, maintain records, insure assets, separate recordkeeping and custody of assets, and perform internal and external audits.

Correct AnswerverifiedShow Answer

Money orders, cashier's cheques, and certified cheques are examples of cash equivalents.

Correct AnswerverifiedShow Answer

Z-Mart had $43 in missing petty cash receipts. The correct procedure is to:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The retailer hopes to increase...
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
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cash consists of cash on hand and demand...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified