Question 1

Control over cash disbursements is generally more effective when

Accepted Answer

A)  all bills are paid in cash.
B)  disbursements are made by the accounts payable subsidiary clerk.
C)  payments are made by check.
D)  all purchases are made on credit.E) B) and C)
F) B) and D)

Question 2

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following is not an objective of a system of internal control?

Accepted Answer

A)  Safeguard company assets
B)  Overstate liabilities in order to be conservative
C)  Enhance the accuracy and reliability of accounting records
D)  Reduce the risks of errorsE) C) and D)
F) B) and D)

Question 4

The principles of internal control activities are used

Accepted Answer

A)  in the U.S.but not globally.
B)  internationally but not in the U.S.
C)  in the U.S.and Canada but not globally.
D)  globally.IFRSE) All of the above
F) A) and B)

Question 5

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation:  The adjusted cash balance per books on July 31 is

Accepted Answer

A)  $17,640.
B)  $18,840.
C)  $25,640.
D)  $26,840.E) C) and D)
F) None of the above C

Question 6

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10.What is Yaddof's adjusted cash balance on April 30?

Accepted Answer

A)  $2,185
B)  $2,245
C)  $2,300
D)  $2,340E) None of the above
F) C) and D)

Question 7

Fitzgerald Company wrote checks totaling $34,160 during October and $37,300 during November.$32,480 of these checks cleared the bank in October, and $36,440 cleared the bank in November.What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $2,860
B)  $1,680
C)  $2,540
D)  $3,140E) B) and C)
F) A) and C)

Question 8

Trudy, Inc.had the following bank reconciliation at March 31, 2021:  All reconciling items at March 31, 2021 cleared the bank in April.Outstanding checks at April 30, 2021 totaled $6,000.There were no deposits in transit at April 30, 2021.What is the cash balance per books at April 30, 2021?

Accepted Answer

A)  $25,900
B)  $31,900
C)  $34,200
D)  $38,500E) All of the above
F) C) and D)

Question 9

In the month of November, Kinsey Company Inc.wrote checks in the amount of $27,750. In December, checks in the amount of $37,974 were written.In November, $25,404 of
These checks were presented to the bank for payment, and $32,649 were presented in
December.What is the amount of outstanding checks at the end of December?

Accepted Answer

A)  $2,346
B)  $7,245
C)  $7,671
D)  $10,224E) B) and D)
F) A) and B)

Question 10

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Accepted Answer

A) True 
 B)False  True

Question 11

The custodian of a company asset should

Accepted Answer

A)  have access to the accounting records for that asset.
B)  be someone outside the company.
C)  not have access to the accounting records for that asset.
D)  be an accountant.E) C) and D)
F) A) and B)

Question 12

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800.As a result of this reconciliation, Carothers will

Accepted Answer

A)  reduce its cash account by $50.
B)  reduce its cash account by $210.
C)  reduce its cash account by $950.
D)  increase its cash account by $110.E) None of the above
F) All of the above

Question 13

The custodian of the petty cash fund has the responsibility for recording a journal entry every time cash is used from the fund.

Accepted Answer

A) True 
 B)False

Question 14

The cash account shows a balance of $90,000 before reconciliation.The bank statement does not include a deposit of $5,000 made on the last day of the month.The bank statement shows a collection by the bank of $2,400 and a customer's check for $640 was returned because it was NSF.A customer's check for $900 was recorded on the books as $1,080, and a check written for $138 was recorded as $192.The correct balance in the cash account was

Accepted Answer

A)  $91,580.
B)  $91,634.
C)  $92,400.
D)  $96,634.E) B) and C)
F) A) and C)

Question 15

Related buying activities include

Accepted Answer

A)  ordering, receiving, paying.
B)  ordering, selling, paying.
C)  ordering, shipping, billing.
D)  selling, shipping, paying.E) A) and C)
F) A) and D)

Question 16

Controls that enhance the accuracy and reliability of the accounting records are

Accepted Answer

A)  automated controls.
B)  external controls.
C)  mechanical and electronic controls.
D)  physical controls.E) B) and D)
F) All of the above

Question 17

Shane Company gathered the following reconciling information in preparing its April bank reconciliation:  The adjusted cash balance per books on April 30 is

Accepted Answer

A)  $12,930.
B)  $14,190.
C)  $23,730.
D)  $24,990.E) None of the above
F) A) and B)

Question 18

Companies that are subject to, but fail to comply with, the Sarbanes-Oxley Act

Accepted Answer

A)  may do so legally by obtaining an exemption.
B)  will be automatically dissolved.
C)  may be subject to fines and officer imprisonment.
D)  may be forced to sell their foreign subsidiaries.E) A) and D)
F) B) and C) C

Question 19

Allowing only the treasurer to sign checks is an example of

Accepted Answer

A)  documentation procedures.
B)  segregation of duties.
C)  other controls.
D)  establishment of responsibility.E) None of the above
F) A) and B)

Question 20

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Accepted Answer

A) True 
 B)False

Exam 7: Fraud, Internal Control and Cash

Control over cash disbursements is generally more effective when

Correct Answer
verified

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Correct Answer
verified

Which one of the following is not an objective of a system of internal control?

Correct Answer
verified

The principles of internal control activities are used

Correct Answer
verified

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation: The adjusted cash balance per books on July 31 is

Correct Answer
verified
C

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10.What is Yaddof's adjusted cash balance on April 30?

Correct Answer
verified

Fitzgerald Company wrote checks totaling $34,160 during October and $37,300 during November.$32,480 of these checks cleared the bank in October, and $36,440 cleared the bank in November.What was the amount of outstanding checks on November 30?

Correct Answer
verified

Trudy, Inc.had the following bank reconciliation at March 31, 2021: All reconciling items at March 31, 2021 cleared the bank in April.Outstanding checks at April 30, 2021 totaled $6,000.There were no deposits in transit at April 30, 2021.What is the cash balance per books at April 30, 2021?

Correct Answer
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Correct Answer
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All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Correct Answer
verified
True

The custodian of a company asset should

Correct Answer
verified

Carothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,550; deposits in transit $2,500; NSF check $160; bank service charge $50; cash balance per books $8,800.As a result of this reconciliation, Carothers will

Correct Answer
verified

The custodian of the petty cash fund has the responsibility for recording a journal entry every time cash is used from the fund.

Correct Answer
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Correct Answer
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Related buying activities include

Correct Answer
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Controls that enhance the accuracy and reliability of the accounting records are

Correct Answer
verified

Shane Company gathered the following reconciling information in preparing its April bank reconciliation: The adjusted cash balance per books on April 30 is

Correct Answer
verified

Companies that are subject to, but fail to comply with, the Sarbanes-Oxley Act

Correct Answer
verified
C

Allowing only the treasurer to sign checks is an example of

Correct Answer
verified

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Correct Answer
verified

Exam 7: Fraud, Internal Control and Cash

Control over cash disbursements is generally more effective when

Correct AnswerverifiedShow Answer

The duties of approving an item for payment and paying the item should be done by different departments or individuals.

Correct AnswerverifiedShow Answer

Which one of the following is not an objective of a system of internal control?

Correct AnswerverifiedShow Answer

The principles of internal control activities are used

Correct AnswerverifiedShow Answer

Electric Sunset Company gathered the following reconciling information in preparing its July bank reconciliation: The adjusted cash balance per books on July 31 is

Correct AnswerverifiedC

At April 30, Yaddof Company has the following bank information: cash balance per bank $2,300; outstanding checks $390; deposits in transit $275; credit memo for interest $50; bank service charge $10.What is Yaddof's adjusted cash balance on April 30?

Correct AnswerverifiedShow Answer

Fitzgerald Company wrote checks totaling $34,160 during October and $37,300 during November.$32,480 of these checks cleared the bank in October, and $36,440 cleared the bank in November.What was the amount of outstanding checks on November 30?

Correct AnswerverifiedShow Answer

Trudy, Inc.had the following bank reconciliation at March 31, 2021: All reconciling items at March 31, 2021 cleared the bank in April.Outstanding checks at April 30, 2021 totaled $6,000.There were no deposits in transit at April 30, 2021.What is the cash balance per books at April 30, 2021?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All reconciling items in determining the adjusted cash balance per books require the depositor to make adjusting journal entries to the Cash account.

Correct AnswerverifiedTrue

The custodian of a company asset should

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The custodian of the petty cash fund has the responsibility for recording a journal entry every time cash is used from the fund.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Related buying activities include

Correct AnswerverifiedShow Answer

Controls that enhance the accuracy and reliability of the accounting records are

Correct AnswerverifiedShow Answer

Shane Company gathered the following reconciling information in preparing its April bank reconciliation: The adjusted cash balance per books on April 30 is

Correct AnswerverifiedShow Answer

Companies that are subject to, but fail to comply with, the Sarbanes-Oxley Act

Correct AnswerverifiedC

Allowing only the treasurer to sign checks is an example of

Correct AnswerverifiedShow Answer

For efficiency of operations and better control over cash, a company should maintain only one bank account.

Correct AnswerverifiedShow Answer

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C

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True

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C

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