Question 1

Checks presented for payment and paid by the bank are known as

Accepted Answer

A)   Canceled checks
B)   Certified checks
C)   NSF checks
D)   Outstanding checksE) A) and D)
F) None of the above

Question 2

How would customer's NSF checks be dealt with in a bank reconciliation?

Accepted Answer

A)   Added to company's book balance
B)   Deducted from company's book balance
C)   Added to bank statement balance
D)   Deducted from bank statement balanceE) A) and D)
F) C) and D)

Question 3

Which one of the following statements best describes the term "outstanding check?"

Accepted Answer

A)   A check written by the company and presented to the bank for payment.
B)   A check written by the company but not yet presented to the bank for payment.
C)   A check written by a customer that has been presented to the bank for payment.
D)   A check written by a customer that has not yet been presented to the bank for payment.E) A) and D)
F) B) and C)

Question 4

Match the action with the category of internal control procedures
-Safeguarding assets

Accepted Answer

A)  One department should check on another
B)  Internal audit staff ensure all is working as intended
C)  Accounting and cash collection is properly separated
D)  Blank checks are locked at all times when not in use
E)  Origination of initial entry into accounting systemF) Specific authority is given by management for the performance of activities.G) D) and F)
H) A) and B)

Question 5

Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation.
-Customer's check which was deposited on May 31 is not listed on the bank statement

Accepted Answer

A)  Addition to bank balance
B)  Subtraction from bank balance
C)  Addition to book balance
D)  Subtraction from book balance
E)  Would not appear on the May reconciliationF) All of the above
G) None of the above

Question 6

The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Accepted Answer

The answer of The is a subset of the board...

Question 7

Which one of the following items is not included in cash?

Accepted Answer

A)   A bank certificate of deposit for one year
B)   A savings account at the bank
C)   A checking account at the bank
D)   All of the above are included in cashE) A) and C)
F) None of the above

Question 8

Each of the following documents is used in the control of cash receipts except:

Accepted Answer

A)   Cash register tapes
B)   Check lists or prelists
C)   Canceled checks from customers
D)   Bank deposit slipsE) None of the above
F) All of the above C

Question 9

The following set of items describes activities completed by a company in purchasing and paying for merchandise. For each activity, identify whether or not the activity adheres to or violates sound internal control procedures.
All documents attached to an invoice approval form are canceled before a check is signed.

Accepted Answer

A)   Adheres to sound internal control procedures
B)   Violates sound internal control procedures
C)   Neither strengthens nor violates internal controlD) A) and C)
E) None of the above

Question 10

Match the following terms with the best definitions for questions 212 through 219.
-A form used for verification that the items originally requested have been received.

Accepted Answer

A)  Purchase requisition.
B)  Receiving Report.
C)  Vendor Invoice.
D)  Check.
E)  Control procedures.F) Inventory count.G) Segregation of duties.H) Source document control.I) B) and G)
J) A) and H)

Question 11

No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

Accepted Answer

A) True 
 B)False

Question 12

Effective cash management and control includes all of the following except

Accepted Answer

A)   The use of a petty cash fund
B)   Bank reconciliations
C)   Short-term investments of excess cash
D)   Purchase of stocks and bondsE) A) and B)
F) All of the above

Question 13

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 sheet.E) B) and C)
F) A) and B)

Question 14

The treasurer for Rahm Corp. was preparing a bank reconciliation as of September 30, 2014. The following items were identified:

Accepted Answer

The answer of The treasurer for Rahm Corp. was preparing...

Question 15

Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?

Accepted Answer

A)   Segregation of duties
B)   Safeguarding of assets and records
C)   Independent verifications
D)   Proper authorizationsE) A) and D)
F) B) and D) D

Question 16

Which one of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Accepted Answer

A)   A check is prepared for a fixed amount; when the check is cashed, the money is entrusted to a petty cash custodian.
B)   An entry is recorded to establish the fund and obtain the cash.
C)   When appropriate documentation is presented, cash payments are made from the fund; the petty cash custodian retains the documentation.
D)   When the petty cash fund is replenished, an entry is recorded to recognize an increase in the petty cash account.E) All of the above
F) None of the above

Question 17

Match the following terms with the best definitions for questions 212 through 219.
-Actions that company personnel take to make sure that policies set forth by management are followed.

Accepted Answer

A)  Purchase requisition.
B)  Receiving Report.
C)  Vendor Invoice.
D)  Check.
E)  Control procedures.F) Inventory count.G) Segregation of duties.H) Source document control.I) C) and G)
J) C) and E)

Question 18

Match the term with the statement that best defines it.
-Procedures concerned with safeguarding the assets or the reliability of financial statements.

Accepted Answer

A)  Accounting controls
B)  Accounting system
C)  Administrative controls
D)  Audit committee
E)  Board of directorsF) A) and D)
G) C) and D)

Question 19

For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Corporate bonds maturing in 30 days

Accepted Answer

A)  Included
B)  ExcludedC) A) and B)
D) undefined B

Question 20

For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Savings account

Accepted Answer

A)  Included
B)  ExcludedC) A) and B)
D) undefined

Exam 6: Cash and Internal Control

Checks presented for payment and paid by the bank are known as

Correct Answer
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How would customer's NSF checks be dealt with in a bank reconciliation?

Correct Answer
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Which one of the following statements best describes the term "outstanding check?"

Correct Answer
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Match the action with the category of internal control procedures -Safeguarding assets

Correct Answer
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Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation. -Customer's check which was deposited on May 31 is not listed on the bank statement

Correct Answer
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The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Correct Answer
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Which one of the following items is not included in cash?

Correct Answer
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Each of the following documents is used in the control of cash receipts except:

Correct Answer
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C

Correct Answer
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Match the following terms with the best definitions for questions 212 through 219. -A form used for verification that the items originally requested have been received.

Correct Answer
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No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

Correct Answer
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Effective cash management and control includes all of the following except

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

Correct Answer
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The treasurer for Rahm Corp. was preparing a bank reconciliation as of September 30, 2014. The following items were identified:

Correct Answer
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Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?

Correct Answer
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D

Which one of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Correct Answer
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Match the following terms with the best definitions for questions 212 through 219. -Actions that company personnel take to make sure that policies set forth by management are followed.

Correct Answer
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Match the term with the statement that best defines it. -Procedures concerned with safeguarding the assets or the reliability of financial statements.

Correct Answer
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For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet. -Corporate bonds maturing in 30 days

Correct Answer
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B

For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet. -Savings account

Correct Answer
verified

Exam 6: Cash and Internal Control

Checks presented for payment and paid by the bank are known as

Correct AnswerverifiedShow Answer

How would customer's NSF checks be dealt with in a bank reconciliation?

Correct AnswerverifiedShow Answer

Which one of the following statements best describes the term "outstanding check?"

Correct AnswerverifiedShow Answer

Match the action with the category of internal control procedures -Safeguarding assets

Correct AnswerverifiedShow Answer

Latahmer Corporation is reconciling its May bank account. For each item listed, state how it would be handled on the bank reconciliation. -Customer's check which was deposited on May 31 is not listed on the bank statement

Correct AnswerverifiedShow Answer

The is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.

Correct AnswerverifiedShow Answer

Which one of the following items is not included in cash?

Correct AnswerverifiedShow Answer

Each of the following documents is used in the control of cash receipts except:

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

Match the following terms with the best definitions for questions 212 through 219. -A form used for verification that the items originally requested have been received.

Correct AnswerverifiedShow Answer

No special internal control procedures are necessary with a petty cash account because the amount is usually so small.

Correct AnswerverifiedShow Answer

Effective cash management and control includes all of the following except

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The treasurer for Rahm Corp. was preparing a bank reconciliation as of September 30, 2014. The following items were identified:

Correct AnswerverifiedShow Answer

Which internal control procedure is followed when management authorizes the purchasing department to order goods and services for the company?

Correct AnswerverifiedD

Which one of the following procedures is incorrect for setting up and maintaining a petty cash fund?

Correct AnswerverifiedShow Answer

Match the following terms with the best definitions for questions 212 through 219. -Actions that company personnel take to make sure that policies set forth by management are followed.

Correct AnswerverifiedShow Answer

Match the term with the statement that best defines it. -Procedures concerned with safeguarding the assets or the reliability of financial statements.

Correct AnswerverifiedShow Answer

For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet. -Corporate bonds maturing in 30 days

Correct AnswerverifiedB

For the following items Questions 220-227, indicate whether each should be a included or b excluded from the line item titled Cash and cash equivalents on the balance sheet. -Savings account

Correct AnswerverifiedShow Answer

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C

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D

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B

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