Question 1

A bank reconciliation usually yields both an adjusted bank balance and an adjusted book balance.

Accepted Answer

A) True 
 B)False

Question 2

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

A) True 
 B)False

Question 3

Internal control policies and procedures are the same for all companies.

Accepted Answer

A) True 
 B)False

Question 4

Given the following information:
  Petty cash balance $530.00 Courier receipt $74.22 Postage receipt $25.00 Office Supplies receipt $95.64 Business meal receipt$54.21 Cash on hand at the end of the month $299.7\begin{array} { l l l l } 	ext { Petty cash balance } & \$ 530.00 & 	ext { Courier receipt } & \$ 74.22 \ 	ext { Postage receipt } & \$ 25.00 & 	ext { Office Supplies receipt } & \$ 95.64 \	ext { Business meal receipt}& \$ 54.21 &	ext { Cash on hand at the end of the month }& \$ 299.7 \end{array} Petty cash balance  Postage receipt  Business meal receipt​$530.00$25.00$54.21​ Courier receipt  Office Supplies receipt  Cash on hand at the end of the month ​$74.22$95.64$299.7​

What is the amount that needs to be reimbursed?

Accepted Answer

A)   $365.27
B)   $289.06
C)   $280.73
D)   $181.22
E)   $230.29 F) B) and C)
G) B) and E)

Question 5

Given the following information:
  Petty cash balance $450.00 Courier receipt $82.50 Postage receipt $48.00 Office Supplies receipt $56.22 Business meal receipt $102.34 Cash on hand at the end of the month$76.21\begin{array}{llll}	ext { Petty cash balance } & \$ 450.00 & 	ext { Courier receipt } & \$ 82.50 \	ext { Postage receipt } & \$ 48.00 & 	ext { Office Supplies receipt } & \$ 56.22\	ext { Business meal receipt }& \$ 102.34&	ext { Cash on hand at the end of the month}& \$ 76.21 \end{array} Petty cash balance  Postage receipt  Business meal receipt ​$450.00$48.00$102.34​ Courier receipt  Office Supplies receipt  Cash on hand at the end of the month​$82.50$56.22$76.21​

What is the amount that needs to be reimbursed?

Accepted Answer

A)   $365.27
B)   $289.06
C)   $373.79
D)   $289.00
E)   $450.00 F) A) and B)
G) A) and C)

Question 6

The use of internal controls provides guaranteed protection against losses due to operating activities.

Accepted Answer

A) True 
 B)False

Question 7

A company reported net sales for Year 1 of $285,000 and $575,000 for Year 2.The year-end balances of accounts receivable were $49,000 for Year 1 and $85,000 for Year 2.Calculate the days' sales uncollected at the end of each year for this company and describe any changes in the apparent liquidity of the company's receivables.

Accepted Answer

Year 1: ($49,000/$285,000)x 365 = 63 day...

Question 8

The ________________ ratio reflects the liquidity of a company's accounts receivable.

Accepted Answer

days' sale...

Question 9

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Accepted Answer

A) True 
 B)False

Question 10

A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period.As a result,in preparing this period's reconciliation,the amount of this deposit should be:

Accepted Answer

A)   Added to the book balance of cash.
B)   Deducted from the book balance of cash.
C)   Added to the bank balance of cash.
D)   Deducted from the bank balance of cash.
E)   Not included as a reconciling item.F) B) and D)
G) D) and E)

Question 11

_________________________ is the electronic transfer of cash from one party to another.

Accepted Answer

Electronic...

Question 12

A company purchases merchandise on November 2 at a $2,400 invoice price (terms 3/10,n/30) and then pays all amounts owed on November 12.Using periodic inventory and net purchases methods,what are the proper entries to record these two transactions?

Accepted Answer

A)     Nov. 2  Merchandise Inventory 2,400 Accounts Payable 2,400\begin{array} { | c | c | r | r | } \hline 	ext { Nov. 2 } & 	ext { Merchandise Inventory } & 2,400 & \\hline & 	ext { Accounts Payable } & & 2,400 \\hline\end{array} Nov. 2 ​ Merchandise Inventory  Accounts Payable ​2,400​2,400​​   Nov. 11  Accounts Payable 2,400 Cash 2,400\begin{array} { | c | c | r | r | } \hline 	ext { Nov. 11 } & 	ext { Accounts Payable } & 2,400 & \\hline & 	ext { Cash } & & 2,400 \\hline\end{array} Nov. 11 ​ Accounts Payable  Cash ​2,400​2,400​​ 
B)     Nov. 2  Purchases 2,328 Accounts Payable 2,328\begin{array} { | l | l | r | r | } \hline 	ext { Nov. 2 } & 	ext { Purchases } & 2,328 & \\hline & 	ext { Accounts Payable } & & 2,328 \\hline\end{array} Nov. 2 ​ Purchases  Accounts Payable ​2,328​2,328​​   Nov. 11  Accounts Payable 2,328 Cash 2,328\begin{array} { | c | c | r | r | } \hline 	ext { Nov. 11 } & 	ext { Accounts Payable } & 2,328 & \\hline & 	ext { Cash } & & 2,328 \\hline\end{array} Nov. 11 ​ Accounts Payable  Cash ​2,328​2,328​​ 
C)     Nov. 2  Purchases 2,328 Accourts Payable 2,328\begin{array} { | l | c | r | r | } \hline 	ext { Nov. 2 } & 	ext { Purchases } & 2,328 & \\hline & 	ext { Accourts Payable } & & 2,328 \\hline\end{array} Nov. 2 ​ Purchases  Accourts Payable ​2,328​2,328​​   Nov. 11  Accounts Payable 2,328 Purchase Discounts Lost 72 Cash 2,400\begin{array} { | l | l | r | r | } \hline 	ext { Nov. 11 } & 	ext { Accounts Payable } & 2,328 & \\hline & 	ext { Purchase Discounts Lost } & 72 & \\hline & 	ext { Cash } & & 2,400 \\hline\end{array} Nov. 11 ​ Accounts Payable  Purchase Discounts Lost  Cash ​2,32872​2,400​​ 
D)     Nov. 2  Merchandise Inventory 2,328 Accounts Payable 2,328\begin{array} { | c | c | r | r | } \hline 	ext { Nov. 2 } & 	ext { Merchandise Inventory } & 2,328 & \\hline & 	ext { Accounts Payable } & & 2,328 \\hline\end{array} Nov. 2 ​ Merchandise Inventory  Accounts Payable ​2,328​2,328​​   Nov. 11  Accounts Payable 2,328 Inventory 72 Cash 2,400\begin{array} { | l | l | r | r | } \hline 	ext { Nov. 11 } & 	ext { Accounts Payable } & 2,328 & \\hline & 	ext { Inventory } & 72 & \\hline & 	ext { Cash } & & 2,400 \\hline\end{array} Nov. 11 ​ Accounts Payable  Inventory  Cash ​2,32872​2,400​​ 
E)     Nov. 2  Purchases 2,328 Accounts Payable 2,328\begin{array} { | l | c | r | r | } \hline 	ext { Nov. 2 } & 	ext { Purchases } & 2,328 & \\hline & 	ext { Accounts Payable } & & 2,328 \\hline\end{array} Nov. 2 ​ Purchases  Accounts Payable ​2,328​2,328​​   Nov. 11  Accounts Payable 2,328 Purchase Discounts Lost 72 Cash 2,400\begin{array} { | l | l | r | r | } \hline 	ext { Nov. 11 } & 	ext { Accounts Payable } & 2,328 & \\hline & 	ext { Purchase Discounts Lost } & 72 & \\hline & 	ext { Cash } & & 2,400 \\hline\end{array} Nov. 11 ​ Accounts Payable  Purchase Discounts Lost  Cash ​2,32872​2,400​​F) All of the above
G) A) and E)

Question 13

Based on the following information,prepare the general journal entries Avisa must make at November 30.
The following information is available for the Avisa Company for the month of November:
a.On November 30,after all transactions have been recorded,the balance in the company's Cash account has a balance of $27,202.
b.The company's bank statement shows a balance on November 30 of $29,279.
c.Outstanding checks at November 30 include check #3030 in the amount of $1,525 and check #3556 in the amount of $1,459.
d.A credit memo included with the bank statement indicates that the bank collected $780 on a noninterest-bearing note receivable for Avisa.The bank deducted a $10 collection fee and credited the remainder of $770 to Avisa's account.
e.A debit memo included with the bank statement shows a $67 NSF check from a customer,J.Brown.
f.A deposit placed in the bank's night depository on November 30 totaled $1,675 and did not appear on the bank statement.
g.Examination of the checks on the bank statement with the entries in the accounting records reveals that check #3445 for the payment of an account payable was correctly written for $2,450,but was recorded in the accounting records as $2,540.
h.Included with the bank statement was a debit memorandum in the amount of $25 for bank service charges.It has not been recorded on the company's books.

Accepted Answer

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Question 14

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Accepted Answer

A)   After the mail is opened, a list (in triplicate)  of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent.
B)   The bank reconciliation is prepared by a person who does not handle cash or record cash receipts.
C)   For safety, only one person should open the mail and that person should immediately deposit the cash received in the bank.
D)   The cashier should not also be the record keeper who records the amounts received in the accounting records.
E)   All of the above are good internal control procedures over cash receipts that arrive through the mail.F) B) and C)
G) A) and E)

Question 15

The entry to record reimbursement of the petty cash fund for postage expense should include:

Accepted Answer

A)   A debit to Postage Expense.
B)   A debit to Petty Cash.
C)   A debit to Cash.
D)   A debit to Cash Short and Over.
E)   A debit to Supplies.F) A) and B)
G) None of the above

Question 16

A company established a petty cash fund in May of the current year and experienced the following transactions affecting the fund during May:
May 1 Establish petty cash account in the amount of $300.
May 5 Paid for miscellaneous office supplies in the amount of $53.22.
May 9 Reimbursed Human Resource Manager for business lunch,$45.09.
May 15 Paid for minor landscaping services,$75.
May 22 Paid $65.00 for postage.
May 31 Counted remaining cash and discovered that $56.34 remained.
The company decided to increase the petty cash balance to $450.Prepare the journal entry to increase the fund on May 31.

Accepted Answer

Petty Cash...

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

Identify each of the following items as either (a)cash or (b)cash equivalent.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30">_TB6312_00...

Question 20

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables often translates into increased profitability.

Accepted Answer

A) True 
 B)False

Exam 6: Cash and Internal Controls

Correct Answer
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View Answer

Correct Answer
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_________________________ is the electronic transfer of cash from one party to another.

Correct Answer
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Electronic...
View Answer

Correct Answer
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Petty Cash...
View Answer

The use of internal controls provides guaranteed protection against losses due to operating activities.

Correct Answer
verified

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

Correct Answer
verified

Identify each of the following items as either (a)cash or (b)cash equivalent.

Correct Answer
verified
_TB6312_00...
View Answer

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Correct Answer
verified

Correct Answer
verified
Year 1: ($49,000/$285,000)x 365 = 63 day...
View Answer

The ________________ ratio reflects the liquidity of a company's accounts receivable.

Correct Answer
verified
days' sale...
View Answer

A company purchases merchandise on November 2 at a $2,400 invoice price (terms 3/10,n/30) and then pays all amounts owed on November 12.Using periodic inventory and net purchases methods,what are the proper entries to record these two transactions?

Correct Answer
verified

Internal control policies and procedures are the same for all companies.

Correct Answer
verified

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

Correct Answer
verified

The entry to record reimbursement of the petty cash fund for postage expense should include:

Correct Answer
verified

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables often translates into increased profitability.

Correct Answer
verified

A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period.As a result,in preparing this period's reconciliation,the amount of this deposit should be:

Correct Answer
verified

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Correct Answer
verified

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct Answer
verified

A bank reconciliation usually yields both an adjusted bank balance and an adjusted book balance.

Correct Answer
verified

Correct Answer
verified

Exam 6: Cash and Internal Controls

Correct Answerverified\[\begin{array} { | l | l | r | r | } \...View AnswerShow Answer

Correct AnswerverifiedShow Answer

_________________________ is the electronic transfer of cash from one party to another.

Correct AnswerverifiedElectronic...View AnswerShow Answer

Correct AnswerverifiedPetty Cash...View AnswerShow Answer

The use of internal controls provides guaranteed protection against losses due to operating activities.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Identify each of the following items as either (a)cash or (b)cash equivalent.

Correct Answerverified_TB6312_00...View AnswerShow Answer

The journal entry for petty cash reimbursement involves a debit to the appropriate expenses and a credit to Petty Cash.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedYear 1: ($49,000/$285,000)x 365 = 63 day...View AnswerShow Answer

The ________________ ratio reflects the liquidity of a company's accounts receivable.

Correct Answerverifieddays' sale...View AnswerShow Answer

A company purchases merchandise on November 2 at a $2,400 invoice price (terms 3/10,n/30) and then pays all amounts owed on November 12.Using periodic inventory and net purchases methods,what are the proper entries to record these two transactions?

Correct AnswerverifiedShow Answer

Internal control policies and procedures are the same for all companies.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The entry to record reimbursement of the petty cash fund for postage expense should include:

Correct AnswerverifiedShow Answer

When evaluating the days' sales uncollected ratio,generally the less time that money is tied up in receivables often translates into increased profitability.

Correct AnswerverifiedShow Answer

A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period.As a result,in preparing this period's reconciliation,the amount of this deposit should be:

Correct AnswerverifiedShow Answer

Which of the following procedures would weaken the control over cash receipts that arrive through the mail?

Correct AnswerverifiedShow Answer

Deposits in transit are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct AnswerverifiedShow Answer

A bank reconciliation usually yields both an adjusted bank balance and an adjusted book balance.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
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View Answer

Correct Answer
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Correct Answer
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Electronic...
View Answer

Correct Answer
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Petty Cash...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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_TB6312_00...
View Answer

Correct Answer
verified

Correct Answer
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Year 1: ($49,000/$285,000)x 365 = 63 day...
View Answer

Correct Answer
verified
days' sale...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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