Question 1

Maintaining a petty cash fund makes it possible to determine human fraud.

Accepted Answer

A) True 
 B)False

Question 2

Risks involved in e-commerce include:

Accepted Answer

A)  Missing documents.
B)  Computer viruses.
C)  Firewalls.
D)  Encryption.
E)  All of these answers are correct.F) A) and C)
G) A) and B)

Question 3

A bank issues a debit memorandum:

Accepted Answer

A)  To notify a depositor of an EFT.
B)  To notify a depositor of a deduction from a depositor's account.
C)  To notify a depositor of all increases to the depositor's account.
D)  To notify a depositor of an NSF cheque.
E)  To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque.F) B) and D)
G) C) and D)

Question 4

The following information was available for Anderson Company for the month ended May 31, 2015.(a) The book balance at May 31, 2015 was $3,890.22 The bank balance at May 31, 2015 was $5,660.22 Outstanding cheques amounted to $6,310.The May 31st cash receipts of $5,600 were deposited but have not yet(d)appeared on the bank statement.(e)A $50 debit memorandum for cheques printed by the bank was included with the cancelled cheques.A customer's note for $1,000 was collected by the bankinterest on the note was $110.(g)The bank incorrectly recorded a cheque payment of $1,600 as $1,500.Prepare a bank reconciliation for Anderson Company at May 31, 2015.

Accepted Answer

The answer of The following information was available for Anderson...

Question 5

Internal control procedures:

Accepted Answer

A)  Include policies and procedures to safeguard assets.
B)  Eliminate the risk of loss.
C)  Prevent unavoidable losses.
D)  Both eliminate the risk of loss and include policies and procedures to safeguard assets.
E)  All of these answers are correct.F) None of the above
G) A) and C)

Question 6

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Accepted Answer

The retailer normally receives payment f...

Question 7

Quick assets include cash, inventory, and receivables.

Accepted Answer

A) True 
 B)False

Question 8

Limitations of internal control include:

Accepted Answer

A)  Human fraud.
B)  Human error.
C)  Cost-benefit standard.
D)  Human error and fraud.
E)  All of these answers are correct.F) A) and D)
G) C) and D)

Question 9

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Accepted Answer

The answer of Prepare the bank reconciliation for Nightingale Company...

Question 10

The acid-test ratio is also called the quick ratio.

Accepted Answer

A) True 
 B)False

Question 11

The entry necessary to establish a petty cash fund should include:

Accepted Answer

A)  A credit to Petty Cash.
B)  A credit to Cash.
C)  A debit to Cash.
D)  A debit to Petty Cash.
E)  A credit to Cash and a debit to Petty Cash.F) B) and D)
G) B) and E)

Question 12

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Accepted Answer

A) True 
 B)False

Question 13

Banking activities include:

Accepted Answer

A)  Chequing.
B)  Bank accounts.
C)  Electronic funds transfer.
D)  Bank deposits.
E)  All of these answers are correct.F) A) and E)
G) D) and E)

Question 14

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Accepted Answer

A)  Cash Receivable account.
B)  Petty Cash account.
C)  Bank Reconciliation account.
D)  Cash Over and Short account.
E)  Cash Lost account.F) A) and E)
G) B) and D)

Question 15

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 16

Discuss the purpose of a bank reconciliation.

Accepted Answer

A bank reconciliation is a procedure des...

Question 17

Which of the following is NOT a principle of internal control?

Accepted Answer

A)  Audits should always be conducted by employees internal to the organization.
B)  Responsibility for related transactions should be divided.
C)  Responsibilities should be clearly established.
D)  Assets should be insured and employees bonded.
E)  Adequate records should be maintained.F) A) and B)
G) D) and E)

Question 18

The acid-test ratio:

Accepted Answer

A)  Measures liquidity.
B)  Measures profitability.
C)  Is also called the quick ratio.
D)  Is also called the quick ratio and measures liquidity.
E)  All of these answers are correct.F) C) and D)
G) A) and D)

Question 19

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Accepted Answer

A) True 
 B)False

Question 20

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Accepted Answer

A) True 
 B)False

Exam 7: Internal Control and Cash

The entry necessary to establish a petty cash fund should include:

Correct Answer
verified

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Correct Answer
verified

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Correct Answer
verified

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Correct Answer
verified

Quick assets include cash, inventory, and receivables.

Correct Answer
verified

Which of the following is NOT a principle of internal control?

Correct Answer
verified

Risks involved in e-commerce include:

Correct Answer
verified

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Correct Answer
verified
The retailer normally receives payment f...
View Answer

Discuss the purpose of a bank reconciliation.

Correct Answer
verified
A bank reconciliation is a procedure des...
View Answer

Correct Answer
verified

Banking activities include:

Correct Answer
verified

A bank issues a debit memorandum:

Correct Answer
verified

The acid-test ratio is also called the quick ratio.

Correct Answer
verified

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Correct Answer
verified

Maintaining a petty cash fund makes it possible to determine human fraud.

Correct Answer
verified

The acid-test ratio:

Correct Answer
verified

Limitations of internal control include:

Correct Answer
verified

Internal control procedures:

Correct Answer
verified

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Correct Answer
verified

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Correct Answer
verified

Exam 7: Internal Control and Cash

The entry necessary to establish a petty cash fund should include:

Correct AnswerverifiedShow Answer

The quick ratio is a more accurate measure of a company's liquidity than the current ratio.

Correct AnswerverifiedShow Answer

Small differences between cash sales and the amounts on the cash register are directly debited or credited to the cash account.

Correct AnswerverifiedShow Answer

An income statement account used to record cash overages and cash shortages arising from omitted petty cash receipts and from errors in making change is the:

Correct AnswerverifiedShow Answer

Quick assets include cash, inventory, and receivables.

Correct AnswerverifiedShow Answer

Which of the following is NOT a principle of internal control?

Correct AnswerverifiedShow Answer

Risks involved in e-commerce include:

Correct AnswerverifiedShow Answer

Identify the advantages for retailers of allowing credit cards to be used in making purchases by their customers.

Correct AnswerverifiedThe retailer normally receives payment f...View AnswerShow Answer

Discuss the purpose of a bank reconciliation.

Correct AnswerverifiedA bank reconciliation is a procedure des...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Banking activities include:

Correct AnswerverifiedShow Answer

A bank issues a debit memorandum:

Correct AnswerverifiedShow Answer

The acid-test ratio is also called the quick ratio.

Correct AnswerverifiedShow Answer

Internal control devices for banking activities include signature cards, deposit slips, cheques, and bank statements.

Correct AnswerverifiedShow Answer

Maintaining a petty cash fund makes it possible to determine human fraud.

Correct AnswerverifiedShow Answer

The acid-test ratio:

Correct AnswerverifiedShow Answer

Limitations of internal control include:

Correct AnswerverifiedShow Answer

Internal control procedures:

Correct AnswerverifiedShow Answer

The journal entry for petty cash reimbursement is a debit to various expenses and a credit to Petty Cash.

Correct AnswerverifiedShow Answer

Prepare the bank reconciliation for Nightingale Company at March 31, 2017.

Correct AnswerverifiedShow 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
The retailer normally receives payment f...
View Answer

Correct Answer
verified
A bank reconciliation is a procedure des...
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
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