Question 1

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; Cr. Cash over and short, $8; Cr. Petty cash, $400.
B)  Dr. Office Supplies, $80; Dr. Merchandise inventory, $160; Dr. Miscellaneous expenses, $20; Dr. Cash over and short, $8; Cr. Petty cash, $268.
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, $252.F) A) and B)
G) B) and D)

Question 2

A remittance advice is a(n) :

Accepted Answer

A)  Explanation for a payment by check.
B)  Bank statement.
C)  Electronic funds transfer.
D)  Cancelled check.
E)  Internal voucher.F) A) and C)
G) B) and C)

Question 3

Identify each of the following items 1 through 10 as either (A)cash or (B)cash equivalent.
1. Coins
_____ 2. Petty cash
_____ 3. Three-month certificate of deposit
4. Commercial paper
_____ 5. Currency
6. Certified check
7. Cashier's check
_____ 8. Money market accounts
9. Money orders
_____ 10. U.S. treasury bills

Accepted Answer

1. A; 2. A; 3. B; 4....

Question 4

Assigning purchasing, receiving, and paying for merchandise to one department or individual is a way to streamline a voucher system.

Accepted Answer

A) True 
 B)False

Question 5

When reimbursing the petty cash fund:

Accepted Answer

A)  Appropriate expense accounts are debited.
B)  Cash is debited.
C)  Petty Cash is debited.
D)  Petty Cash is credited.
E)  No expenses are recorded.F) B) and E)
G) All of the above

Question 6

Freeman Co. had net sales of $4.2 million and ending accounts receivable of $0.8 million. Its days' sales uncollected equals:

Accepted Answer

A)  11.5 days.
B)  69.5 days.
C)  19.2 days.
D)  5.3 days.
E)  292 days.F) D) and E)
G) A) and B)

Question 7

The number of days' sales uncollected is calculated by:

Accepted Answer

A)  Dividing accounts receivable by net sales and multiplying by 365.
B)  Dividing accounts receivable by net sales.
C)  Multiplying net sales by accounts receivable and dividing by 365.
D)  Dividing net sales by accounts receivable.
E)  Dividing net sales by accounts receivable and multiplying by 365.F) C) and D)
G) D) and E)

Question 8

Two clerks sharing the same cash register is a violation of which internal control principle?

Accepted Answer

A)  Maintain adequate records.
B)  Establish responsibilities.
C)  Apply technological controls.
D)  Bond key employees.
E)  Insure assets.F) C) and D)
G) None of the above

Question 9

Havermill Co. establishes a $250 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $73 for Office Supplies, $137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the reimbursement of the fund on September 30 includes a:

Accepted Answer

A)  Credit to Cash for $250.
B)  Credit to Cash for $18.
C)  Debit to Office Supplies for $73.
D)  Debit Petty Cash for $232.
E)  Credit to Merchandise Inventory for $137.F) A) and B)
G) B) and D)

Question 10

At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The correct entry to record the cash sales is

Accepted Answer

A)  Debit Cash $2,058; credit Sales $2,058.
B)  Debit Cash $2,050; debit Cash Over and Short $8; credit Sales $2,058.
C)  Debit Cash Over and Short $8, credit Sales $8.
D)  Debit Cash $2,058; credit Cash Over and Short $8; credit Sales $2,050.
E)  Debit Cash $2,050; credit Sales $2,050.F) A) and E)
G) C) and E)

Question 11

Quibble Company established a $300 petty cash fund by issuing a check to the custodian on February 1. On February 15, the petty cash fund was replenished and increased to $800 in total. The contents of the petty cash fund at the time of the February 15 replenishment were:
 $$\begin{array} { | l | r | r | } 
\hline \begin{array} { l } 
\text { Currency and } \
\text { coins }
\end{array} & & \$ 12 \
\hline \begin{array} { l } 
\text { Petty cash } \
\text { receipts for: }
\end{array} & & \
\hline \begin{array} { l } 
\text { Transportation- } \
\text { in for inventory }
\end{array} & \$ 39 & \
\hline \text { Delivery expense } & 88 & \
\hline \begin{array} { l } 
\text { Repairs to office } \
\text { equipment }
\end{array} & 47 & \
\hline \text { Postage } & 64 & \
\hline \begin{array} { l } 
\text { Entertainment of } \
\text { customers }
\end{array} & 53 & 291 \
\hline \text { Total } & & \$ 303 \
\hline
\end{array}$$ 
The company uses the perpetual inventory method. Prepare Quibble's general journal entry to
record both the reimbursement and the increase of the petty fund on February 15.

Accepted Answer

The answer of Quibble Company established a $300 petty cash...

Question 12

The three parties involved with a check are:

Accepted Answer

A)  The maker, the manager, and the payee.
B)  The writer, the cashier, and the bank.
C)  The bookkeeper, the payee, and the bank.
D)  The signer, the cashier, and the company.
E)  The maker, the payee, and the bank.F) B) and C)
G) All of the above

Question 13

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Accepted Answer

Internal control principles as applied t...

Question 14

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

Question 15

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 16

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Accepted Answer

A) True 
 B)False

Exam 8: Cash and Internal Controls

Correct Answer
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When reimbursing the petty cash fund:

Correct Answer
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The number of days' sales uncollected is calculated by:

Correct Answer
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Correct Answer
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The three parties involved with a check are:

Correct Answer
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Correct Answer
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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
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Assigning purchasing, receiving, and paying for merchandise to one department or individual is a way to streamline a voucher system.

Correct Answer
verified

Two clerks sharing the same cash register is a violation of which internal control principle?

Correct Answer
verified

Freeman Co. had net sales of $4.2 million and ending accounts receivable of $0.8 million. Its days' sales uncollected equals:

Correct Answer
verified

At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The correct entry to record the cash sales is

Correct Answer
verified

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Correct Answer
verified

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Correct Answer
verified
Internal control principles as applied t...
View Answer

Identify each of the following items 1 through 10 as either (A)cash or (B)cash equivalent. 1. Coins ___ 2. Petty cash _ 3. Three-month certificate of deposit 4. Commercial paper _ 5. Currency 6. Certified check 7. Cashier's check _ 8. Money market accounts 9. Money orders ___ 10. U.S. treasury bills

Correct Answer
verified
1. A; 2. A; 3. B; 4....
View Answer

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

Correct Answer
verified

A remittance advice is a(n) :

Correct Answer
verified

Exam 8: Cash and Internal Controls

Correct AnswerverifiedShow Answer

When reimbursing the petty cash fund:

Correct AnswerverifiedShow Answer

The number of days' sales uncollected is calculated by:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The three parties involved with a check are:

Correct AnswerverifiedShow Answer

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

Assigning purchasing, receiving, and paying for merchandise to one department or individual is a way to streamline a voucher system.

Correct AnswerverifiedShow Answer

Two clerks sharing the same cash register is a violation of which internal control principle?

Correct AnswerverifiedShow Answer

Freeman Co. had net sales of $4.2 million and ending accounts receivable of $0.8 million. Its days' sales uncollected equals:

Correct AnswerverifiedShow Answer

At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash register is $2,058. The correct entry to record the cash sales is

Correct AnswerverifiedShow Answer

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

Correct AnswerverifiedShow Answer

Discuss how the principles of internal control apply to cash receipts through the mail by giving several examples of good control measures that should be implemented.

Correct AnswerverifiedInternal control principles as applied t...View AnswerShow Answer

Correct Answerverified1. A; 2. A; 3. B; 4....View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

A remittance advice is a(n) :

Correct AnswerverifiedShow Answer

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Internal control principles as applied t...
View Answer

Correct Answer
verified
1. A; 2. A; 3. B; 4....
View Answer

Correct Answer
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Correct Answer
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