Question 1

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided.
Terms:
-____ Withdraws funds directly from the user's account at the time of use.

Accepted Answer

A)  Cash equivalent
B)  Bank reconciliation
C)  Petty cash
D)  Debit card
E)  Credit cardF) D) and E)
G) C) and D)

Question 2

A company's cash balance is reported in which two financial statements?

Accepted Answer

A)   Income statement and statement of cash flows.
B)   Balance sheet and statement of cash flows.
C)   Income statement and balance sheet.
D)   Balance sheet and statement of stockholders' equity.E) A) and B)
F) A) and C)

Question 3

____ Issue common stock.

Accepted Answer

A)  Cash inflow from operating activities
B)  Cash outflow from financing activities
C)  Cash outflow from operating activities
D)  Cash inflow from investing activities
E)  Cash inflow from financing activitiesF) Cash outflow from investing activitiesG) A) and B)
H) A) and C)

Question 4

The act of collusion refers to:

Accepted Answer

A)   Top management and lower-level employees working together to share information necessary for effective internal controls.
B)   Two or more people acting in coordination to circumvent internal controls.
C)   Management working with an auditor to prevent occupational fraud.
D)   Middle-level managers taking full responsibility for effective internal controls.E) All of the above
F) B) and D)

Question 5

Recording all cash receipts as soon as possible is considered a good internal control.

Accepted Answer

A) True 
 B)False

Question 6

When customers pay for services with a debit card, the company should debit Cash and credit Service Revenue.

Accepted Answer

A) True 
 B)False

Question 7

Consider the following cash flow items:
Pay amount owed to bank for previous borrowing.
Pay utility costs.
Purchase equipment to be used in operations.
Purchase office supplies.
Purchase one year of rent in advance.
Pay workers' salaries.
Pay for research and development costs.
Pay taxes to the IRS.
Sell common stock to investors.
How many of these cash flow items involve financing activities?

Accepted Answer

A)   Zero.
B)   One.
C)   Two.
D)   Three.E) B) and C)
F) A) and C)

Question 8

Listed below are six terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided
Terms:
-____ Checks written by the company but not yet recorded by the bank.

Accepted Answer

A)  Bank service fees
B)  Deposits outstanding
C)  Interest earned
D)  NSF checks
E)  Company errorF) Checks outstandingG) C) and D)
H) C) and E)

Question 9

After preparing a bank reconciliation, the service fee charged by the bank would be recorded with:

Accepted Answer

A)   A credit to Service Fees Expense.
B)   A debit to Cash.
C)   A credit to Service Fees Revenue.
D)   A debit to Service Fees Expense.E) A) and B)
F) All of the above

Question 10

Which of the following is NOT involved in the replenishment of the petty cash fund?

Accepted Answer

A)   Transactions related to vouchers will be recorded.
B)   Management will verify that the total of all vouchers equals the amount of cash missing from the petty cash fund.
C)   Weekly payroll checks will be recorded.
D)   Management will withdraw cash from the bank and place it in the petty cash fund.E) None of the above
F) All of the above

Question 11

An example of a bank error that causes the company's balance and bank's balance of cash to differ is the purchase of supplies with a check.

Accepted Answer

A) True 
 B)False

Question 12

Whether a customer uses cash, a check, or a debit card to make a purchase, the company records the transaction as a cash sale.

Accepted Answer

A) True 
 B)False

Question 13

What is the concept behind separation of duties in establishing internal controls?

Accepted Answer

A)   The company's financial accountant should not share information with the company's tax accountant.
B)   Duties of middle-level managers should be clearly separated from those of top executives.
C)   Employee fraud is less likely to occur when access to assets and access to accounting records are separated.
D)   The external auditors of the company should have no contact with managers while the audit is taking place.E) A) and B)
F) A) and C)

Question 14

The petty cash fund represents cash on hand and is used to pay for minor purchases.

Accepted Answer

A) True 
 B)False

Question 15

After preparing a bank reconciliation, the collection of a note by the bank on a company's behalf would be recorded with:

Accepted Answer

A)   A credit to Notes Receivable.
B)   A credit to Cash.
C)   A debit to Notes Receivable.
D)   A credit to Accounts Receivable.E) All of the above
F) B) and C)

Question 16

Consider the following cash flow items:
Pay amount owed to bank for previous borrowing.
Pay utility costs.
Purchase equipment to be used in operations.
Purchase office supplies.
Pay one year of rent in advance.
Pay workers' salaries.
Pay for research and development costs.
Pay taxes to the IRS.
Sell common stock to investors.
How many of these cash flow items involve investing activities?

Accepted Answer

A)   Zero.
B)   One.
C)   Two.
D)   Three.E) B) and C)
F) None of the above

Question 17

After preparing the bank reconciliation, an NSF check would result in which of the following when recording the adjustment to the company's cash balance?

Accepted Answer

A)   Debit to Service Fee Expense.
B)   Credit to Accounts Payable.
C)   Credit to Service Revenue.
D)   Debit to Accounts Receivable.E) B) and D)
F) All of the above

Question 18

During the current year, a company purchases equipment for $250,000, paying $50,000 immediately and promising to pay the remainder within 30 days after the end of the year. Determine the amount of investing cash flows the company will report in the current year.

Accepted Answer

The answer of During the current year, a company purchases...

Question 19

A company's general ledger shows a cash balance of $2,380. Comparing the company's cash records with the monthly bank statement reveals several additional cash transactions such as deposits outstanding of $1,760, note collected by the bank on the company's behalf of $1,000, and interest earned of $20. The company also finds an error by the bank of an additional deposit of $100. Calculate the correct balance of cash.

Accepted Answer

$2,380 + ...

Question 20

Describe the procedures used to reconcile a company's cash balance.

Accepted Answer

For the bank's cash balance, deposits ou...

Exam 4: Cash and Internal Controls

During the current year, a company purchases equipment for $250,000, paying $50,000 immediately and promising to pay the remainder within 30 days after the end of the year. Determine the amount of investing cash flows the company will report in the current year.

Correct Answer
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Correct Answer
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What is the concept behind separation of duties in establishing internal controls?

Correct Answer
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Recording all cash receipts as soon as possible is considered a good internal control.

Correct Answer
verified

An example of a bank error that causes the company's balance and bank's balance of cash to differ is the purchase of supplies with a check.

Correct Answer
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The act of collusion refers to:

Correct Answer
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A company's cash balance is reported in which two financial statements?

Correct Answer
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After preparing the bank reconciliation, an NSF check would result in which of the following when recording the adjustment to the company's cash balance?

Correct Answer
verified

After preparing a bank reconciliation, the service fee charged by the bank would be recorded with:

Correct Answer
verified

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Withdraws funds directly from the user's account at the time of use.

Correct Answer
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Correct Answer
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$2,380 + ...
View Answer

After preparing a bank reconciliation, the collection of a note by the bank on a company's behalf would be recorded with:

Correct Answer
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Correct Answer
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Which of the following is NOT involved in the replenishment of the petty cash fund?

Correct Answer
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Listed below are six terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided Terms: -____ Checks written by the company but not yet recorded by the bank.

Correct Answer
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When customers pay for services with a debit card, the company should debit Cash and credit Service Revenue.

Correct Answer
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____ Issue common stock.

Correct Answer
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Describe the procedures used to reconcile a company's cash balance.

Correct Answer
verified
For the bank's cash balance, deposits ou...
View Answer

Whether a customer uses cash, a check, or a debit card to make a purchase, the company records the transaction as a cash sale.

Correct Answer
verified

The petty cash fund represents cash on hand and is used to pay for minor purchases.

Correct Answer
verified

Exam 4: Cash and Internal Controls

During the current year, a company purchases equipment for $250,000, paying $50,000 immediately and promising to pay the remainder within 30 days after the end of the year. Determine the amount of investing cash flows the company will report in the current year.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the concept behind separation of duties in establishing internal controls?

Correct AnswerverifiedShow Answer

Recording all cash receipts as soon as possible is considered a good internal control.

Correct AnswerverifiedShow Answer

An example of a bank error that causes the company's balance and bank's balance of cash to differ is the purchase of supplies with a check.

Correct AnswerverifiedShow Answer

The act of collusion refers to:

Correct AnswerverifiedShow Answer

A company's cash balance is reported in which two financial statements?

Correct AnswerverifiedShow Answer

After preparing the bank reconciliation, an NSF check would result in which of the following when recording the adjustment to the company's cash balance?

Correct AnswerverifiedShow Answer

After preparing a bank reconciliation, the service fee charged by the bank would be recorded with:

Correct AnswerverifiedShow Answer

Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided. Terms: -____ Withdraws funds directly from the user's account at the time of use.

Correct AnswerverifiedShow Answer

Correct Answerverified $2,380 + ...View AnswerShow Answer

After preparing a bank reconciliation, the collection of a note by the bank on a company's behalf would be recorded with:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is NOT involved in the replenishment of the petty cash fund?

Correct AnswerverifiedShow Answer

Listed below are six terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term by placing the letter designating the term in the space provided Terms: -____ Checks written by the company but not yet recorded by the bank.

Correct AnswerverifiedShow Answer

When customers pay for services with a debit card, the company should debit Cash and credit Service Revenue.

Correct AnswerverifiedShow Answer

____ Issue common stock.

Correct AnswerverifiedShow Answer

Describe the procedures used to reconcile a company's cash balance.

Correct AnswerverifiedFor the bank's cash balance, deposits ou...View AnswerShow Answer

Whether a customer uses cash, a check, or a debit card to make a purchase, the company records the transaction as a cash sale.

Correct AnswerverifiedShow Answer

The petty cash fund represents cash on hand and is used to pay for minor purchases.

Correct AnswerverifiedShow 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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Correct Answer
verified
$2,380 + ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
verified
For the bank's cash balance, deposits ou...
View Answer

Correct Answer
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Correct Answer
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