Question 1

When using a voucher system,what are the steps on the invoice approval checklist that must be completed before an invoice approval is complete and a voucher prepared?

Accepted Answer

There are four steps that must be comple...

Question 2

A sales system with pre-numbered,controlled sales slips is an example of the internal control principle of ________.

Accepted Answer

maintain a...

Question 3

Maintaining adequate records is an important internal control principle.

Accepted Answer

A) True 
 B)False

Question 4

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check.At the close of business on August 31,its Cash account shows a debit balance of $13,162.Franklin's August bank statement shows $14,237 on deposit in the bank.Determine the adjusted cash balance using the following information:  The adjusted cash balance should be:

Accepted Answer

A)  $18,737
B)  $10,337
C)  $14,887
D)  $13,112
E)  $14,837F) A) and E)
G) All of the above

Question 5

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

Accepted Answer

A) True 
 B)False

Question 6

Franklin Company's bank reconciliation as of August 31 is shown below.  The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Accepted Answer

A)  Debit Cash $4,500; credit Sales $4,500.
B)  Debit Cash $1,725; credit Notes Receivable $1,725.
C)  Debit Cash $50; credit Bank Service Fee Expense $50.
D)  Debit Misc.Expense $3,900; credit Cash $3,900.
E)  Debit Notes Receivable $1,725; credit Cash $1,725.F) A) and E)
G) B) and C)

Question 7

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Accepted Answer

A)  Purchase requisition.
B)  Purchase order.
C)  Invoice.
D)  Receiving report.
E)  Invoice approval.F) All of the above
G) A) and C)

Question 8

Meng Co.maintains a $300 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $80 for office supplies,$160 for merchandise inventory,and $20 for miscellaneous expenses.There is a cash shortage of $8.The journal entry to replenish the fund on January 31 is:

Accepted Answer

A)  Dr.Office Supplies,$80; Dr.Merchandise inventory,$160; Dr.Miscellaneous expenses,$20; Dr.Cash over and short,$8; Cr.Petty cash,$268.
B)  Dr.Office Supplies,$80; Dr.Merchandise inventory,$160; Dr.Miscellaneous expenses,$20; Cr.Cash over and short,$8; Cr.Petty cash,$252.
C)  Dr.Office Supplies,$80; Dr.Merchandise inventory,$160; Dr.Miscellaneous expenses,$20; Cr.Cash over and short,$8; Cr.Cash,$252.
D)  Dr.Office Supplies,$80; Dr.Merchandise inventory,$160; Dr.Miscellaneous expenses,$20; Dr.Cash over and short,$8; Cr.Cash,$268.
E)  Dr.Office Supplies,$80; Dr.Merchandise inventory,$160; Dr.Miscellaneous expenses,$20; Cr.Cash over and short,$8; Cr.Petty cash,$400.F) B) and D)
G) None of the above

Question 9

Internal control systems are:

Accepted Answer

A)  Developed by the Securities and Exchange Commission for public companies.
B)  Developed by the Small Business Administration for non-public companies.
C)  Developed by the Internal Revenue Service for all U.S.companies.
D)  Required by Sarbanes-Oxley (SOX) to be documented and certified if the company's stock is traded on an exchange (a public company) .
E)  Required only if a company plans to engage in interstate commerce.F) B) and C)
G) None of the above

Question 10

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and have maturities of one year.

Accepted Answer

A) True 
 B)False

Question 11

A voucher is an internal document or file:

Accepted Answer

A)  Prepared after an invoice is received.
B)  Used as a substitute for an invoice if the supplier fails to send one.
C)  Used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded.
D)  Takes the place of a bank check.
E)  Prepared before the company orders goods to make sure that all goods are being ordered from an approved vendor list.F) B) and D)
G) B) and C)

Question 12

Two limitations of internal control systems are ________ and ________.

Accepted Answer

human error/human fr...

Question 13

Plenty Co.established a petty cash fund of $150 on October 1.On October 10,the petty cash fund was replenished when there was $49 remaining and there were petty cash receipts for: office supplies,$47; transportation-in on inventory purchased,$32; and postage,$22.On October 15,the petty cash fund was decreased to $125 in total.Plenty Co.uses the perpetual inventory system.Record the above transactions in general journal form.

Accepted Answer

The answer of Plenty Co.established a petty cash fund of...

Question 14

A company's internal control system:

Accepted Answer

A)  Eliminates the company's risk of loss.
B)  Monitors company and employee performance.
C)  Eliminates human error.
D)  Eliminates the need for audits.
E)  Eliminates the need for managers' certification of controls.F) D) and E)
G) B) and D)

Question 15

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash includes currency,coins,deposits in...

Question 16

A key factor in a voucher system includes all of the following except:

Accepted Answer

A)  Only approved departments and individuals are authorized to incur an obligation that will result in the payment of cash.
B)  Procedures for purchasing,receiving,and paying for merchandise are divided among several departments.
C)  The system limits the individuals that can incur cash payment obligations for a company.
D)  It is applied to purchases of merchandise inventory and all other expenses.
E)  It is not necessary if the supplier provides both receiving report and invoice with the merchandise shipped.F) B) and D)
G) C) and E)

Question 17

It is generally 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 18

The entry to establish a petty cash fund includes:

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) D) and E)
G) B) and E)

Question 19

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Accepted Answer

A)  Possible misstatement of financial information.
B)  Possible fraud.
C)  Controls are significantly different across the globe.
D)  Ineffective communication of the change to investors,creditors,and others.
E)  Management's inability to certify the effectiveness of the controls.F) B) and E)
G) C) and E)

Question 20

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________.

Accepted Answer

The answer of When a company purchases an insurance policy...

Exam 6: Reporting and Analyzing Cash,fraud,and Internal Control

Internal control systems are:

Correct Answer
verified

Two limitations of internal control systems are and .

Correct Answer
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human error/human fr...
View Answer

A key factor in a voucher system includes all of the following except:

Correct Answer
verified

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and have maturities of one year.

Correct Answer
verified

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________.

Correct Answer
verified

Explain the difference between cash and cash equivalents.

Correct Answer
verified
Cash includes currency,coins,deposits in...
View Answer

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

Correct Answer
verified

Franklin Company's bank reconciliation as of August 31 is shown below. The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct Answer
verified

A company's internal control system:

Correct Answer
verified

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Correct Answer
verified

A sales system with pre-numbered,controlled sales slips is an example of the internal control principle of ________.

Correct Answer
verified
maintain a...
View Answer

The entry to establish a petty cash fund includes:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Maintaining adequate records is an important internal control principle.

Correct Answer
verified

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

Correct Answer
verified

The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Correct Answer
verified

A voucher is an internal document or file:

Correct Answer
verified

Correct Answer
verified

When using a voucher system,what are the steps on the invoice approval checklist that must be completed before an invoice approval is complete and a voucher prepared?

Correct Answer
verified
There are four steps that must be comple...
View Answer

Exam 6: Reporting and Analyzing Cash,fraud,and Internal Control

Internal control systems are:

Correct AnswerverifiedShow Answer

Two limitations of internal control systems are ________ and ________.

Correct Answerverifiedhuman error/human fr...View AnswerShow Answer

A key factor in a voucher system includes all of the following except:

Correct AnswerverifiedShow Answer

Cash equivalents are short-term highly liquid investment assets that are readily converted to a known cash amount,and have maturities of one year.

Correct AnswerverifiedShow Answer

When a company purchases an insurance policy against losses from theft by an employee,that employee is ________.

Correct AnswerverifiedShow Answer

Explain the difference between cash and cash equivalents.

Correct AnswerverifiedCash includes currency,coins,deposits in...View AnswerShow Answer

Signature cards,deposit tickets,checks,and bank statements are all examples of internal control devices for banking activities.

Correct AnswerverifiedShow Answer

Franklin Company's bank reconciliation as of August 31 is shown below. The adjusting journal entries that Clayborn must record as a result of the bank reconciliation include:

Correct AnswerverifiedShow Answer

A company's internal control system:

Correct AnswerverifiedShow Answer

Internal controls are crucial to companies that convert from U.S.GAAP to IFRS because of all of the following risks except:

Correct AnswerverifiedShow Answer

A sales system with pre-numbered,controlled sales slips is an example of the internal control principle of ________.

Correct Answerverifiedmaintain a...View AnswerShow Answer

The entry to establish a petty cash fund includes:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Maintaining adequate records is an important internal control principle.

Correct AnswerverifiedShow Answer

It is generally 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 internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the:

Correct AnswerverifiedShow Answer

A voucher is an internal document or file:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When using a voucher system,what are the steps on the invoice approval checklist that must be completed before an invoice approval is complete and a voucher prepared?

Correct AnswerverifiedThere are four steps that must be comple...View AnswerShow Answer

Correct Answer
verified

Two limitations of internal control systems are and .

Correct Answer
verified
human error/human fr...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Cash includes currency,coins,deposits in...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
maintain a...
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
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Correct Answer
verified
There are four steps that must be comple...
View Answer