Question 1

A ________ is an internal document (or file) that is used to accumulate information to control cash disbursements.

Accepted Answer

The answer of A ________ is an internal document (or...

Question 2

When two clerks share the same cash register it is a violation of which internal control principle?

Accepted Answer

A)   Establish responsibilities.
B)   Maintain adequate records.
C)   Insure assets.
D)   Bond key employees.
E)   Apply technological controls.F) A) and E)
G) D) and E)

Question 3

Two limitations of internal control systems are ____________________ and _______________.

Accepted Answer

Human error or human...

Question 4

Good internal control dictates that a person who controls an asset also maintains that asset's accounting records.

Accepted Answer

A) True 
 B)False

Question 5

List the principles of internal control.

Accepted Answer

Principles of internal control include t...

Question 6

A company had the following transactions during October:  Using the net method of recording purchases, prepare the journal entries to record these October transactions.

Accepted Answer

The answer of A company had the following transactions during...

Question 7

When a petty cash fund is in use:

Accepted Answer

A)   Expenses paid with petty cash are recorded when the fund is replenished.
B)   Petty Cash is debited when funds are replenished.
C)   Petty Cash is credited when funds are replenished.
D)   Expenses are not recorded.
E)   Cash is debited when funds are replenished.F) B) and D)
G) C) and D)

Question 8

If the Cash Over and Short account has a debit balance at the end of the period, the amount is reported as miscellaneous revenue.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

The answer of _______________________ are deposits made and recorded by...

Question 11

The Petty Cash account is a separate checking account used for small amounts.

Accepted Answer

A) True 
 B)False

Question 12

On August 17, at the end of the day, the cash register's record shows $957, but the count of cash in the register is $965. Prepare the general journal entry to record the day's cash sales.

Accepted Answer

The answer of On August 17, at the end of...

Question 13

Which of the following procedures would weaken 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 these are good internal control procedures over cash receipts that arrive through the mail.F) A) and B)
G) None of the above

Question 14

A purchase requisition is a document the purchasing department sends to the vendor to place an order.

Accepted Answer

A) True 
 B)False

Question 15

An expense resulting from failing to take advantage of cash discounts on purchases is called:

Accepted Answer

A)   Sales discounts.
B)   Trade discounts.
C)   Purchases discounts.
D)   Discounts lost.
E)   Discounts earned.F) C) and D)
G) A) and B)

Question 16

The principles of internal control include:

Accepted Answer

A)   Establish responsibilities.
B)   Maintain minimal records.
C)   Use only computerized systems.
D)   Bond all employees.
E)   Require automated sales systems.F) C) and E)
G) A) and B)

Question 17

The payee is the person who signs a check, authorizing its payment.

Accepted Answer

A) True 
 B)False

Question 18

Principles of internal control include all of the following except:

Accepted Answer

A)   Apply technological controls.
B)   Maintain minimal assets.
C)   Perform regular and independent reviews.
D)   Separate recordkeeping from custody of assets.
E)   Divide responsibilities for related transactions.F) D) and E)
G) A) and D)

Question 19

The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

Accepted Answer

The answer of The _________________ account is used to record...

Question 20

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks, deposits, and bank service charges.

Accepted Answer

A) True 
 B)False

Exam 8: Cash and Internal Controls

A ________ is an internal document (or file) that is used to accumulate information to control cash disbursements.

Correct AnswerverifiedShow Answer

When a petty cash fund is in use:

Correct AnswerverifiedShow Answer

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks, deposits, and bank service charges.

Correct AnswerverifiedShow Answer

The principles of internal control include:

Correct AnswerverifiedShow Answer

Principles of internal control include all of the following except:

Correct AnswerverifiedShow Answer

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct AnswerverifiedShow Answer

When two clerks share the same cash register it is a violation of which internal control principle?

Correct AnswerverifiedShow Answer

Good internal control dictates that a person who controls an asset also maintains that asset's accounting records.

Correct AnswerverifiedShow Answer

A purchase requisition is a document the purchasing department sends to the vendor to place an order.

Correct AnswerverifiedShow Answer

A company had the following transactions during October: Using the net method of recording purchases, prepare the journal entries to record these October transactions.

Correct AnswerverifiedShow Answer

If the Cash Over and Short account has a debit balance at the end of the period, the amount is reported as miscellaneous revenue.

Correct AnswerverifiedShow Answer

The _________________ account is used to record the effects of cash overages and shortages from errors in making change.

Correct AnswerverifiedShow Answer

Two limitations of internal control systems are ____________________ and _______________.

Correct AnswerverifiedHuman error or human...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

The payee is the person who signs a check, authorizing its payment.

Correct AnswerverifiedShow Answer

The Petty Cash account is a separate checking account used for small amounts.

Correct AnswerverifiedShow Answer

List the principles of internal control.

Correct AnswerverifiedPrinciples of internal control include t...View AnswerShow Answer

On August 17, at the end of the day, the cash register's record shows $957, but the count of cash in the register is $965. Prepare the general journal entry to record the day's cash sales.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An expense resulting from failing to take advantage of cash discounts on purchases is called:

Correct AnswerverifiedShow Answer

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Two limitations of internal control systems are ______ and _.

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Human error or human...
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Principles of internal control include t...
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