Accounting Final Exam (Exam #8)
an addition on the book side
A check was written by a business for $507 but was recorded in the journal as $705. How would this error be included on the bank reconciliation?
an employee specifically authorized by the company
A company check for payment must be signed by ________.
separation of duties
At Carlson Services, the cashier collects checks and cash from customers, and the junior accountant records the transactions in the journal. The controller approves the journal entries and bank reconciliations. The treasurer signs checks and approves contracts. Which internal control procedure is exemplified in the above situation?
bank reconciliation
A ________ is a document explaining the reasons for the difference between a depositor's Cash account in the ledger and the depositor's cash balance in its bank account.
competent, reliable, and ethical personnel
Vaughan Services hires a new accountant to maintain its petty cash fund. Although the employee possesses an accounting degree, he/she had been previously convicted of embezzlement. Which internal control procedure needs to be addressed in this situation?
payee
When a check is issued, the party being paid the cash is referred to as the ________.
Cash
Which is the most liquid form of asset?
The store clerk deposits the cash in the bank.
Which of the following is NOT an appropriate internal control for cash receipts over the counter?
The invoices and orders must be pre−numbered.
Which of the following is included in the internal control procedure—documents?
The controller compares the records of the day's bank deposit amount from the treasurer and the debit to Cash from the accounting department.
Which of the following is the last step in the daily control over cash receipts by mail?
One of the major purposes of internal control is to ensure that the assets are safeguarded.
Which of the following is true of internal control?
deposit in transit and outstanding checks
Which of the following items are reconciling items on the bank side of the reconciliation?
bank service charge and correction of book error
Which of the following items are reconciling items on the book side of the reconciliation?
Which of the following items would require an adjusting entry after preparation of the bank reconciliation?
Which of the following items would require an adjusting entry after preparation of the bank reconciliation?
It is an order to purchase goods from a supplier.
Which of the following statements describes a purchase order?
It is a report showing that the goods have been received in good condition, as ordered.
Which of the following statements describes a receiving report?
A bank statement is a document from the bank that reports the activity in the customer's account.
Which of the following statements is correct?
a debit to Accounts Receivable and a credit to Cash
Which of the following would be included in the journal to record an NSF check?
It shows each authorized person's signature for a bank account.
Which one of the following is true of a signature card?
It should not be prepared by an employee who handles cash transactions.
Which one of the following is true of the bank reconciliation?
nonsufficient funds check
A check for which a maker's bank account has inadequate money to pay the check is known as a(n) ________.
$308
A company has a petty cash fund amount of $450.When replenished, it has petty cash tickets of $37 for gas expense, $24 for postage expense,$137 for supplies expense, and $110 for miscellaneous expenses. Assume there is no shortage or overage. In the journal entry, Cash would be credited for ________.
$348
A company has a petty cash fund amount of $850. When replenished, it has petty cash tickets of $40 for gas expense, $25 for postage expense, $162 for supplies expense, and $110 for miscellaneous expenses. Upon comparing receipts with the cash, it was determined that the Petty Cash fund was short by $11. In the journal entry, Cash would be credited for ________.
$5,640
A company received a bank statement with a balance of $6,200. Reconciling items included a bookkeeper error of $400—a $400 check recorded as $800—two outstanding checks totaling $830, a service charge of $21, a deposit in transit of $270, and interest revenue of $20. What is the adjusted bank balance?
a debit to various expenses for $310
A petty cash fund was established with a $350 balance. It currently has cash of $40 and petty cash tickets totaling $310. Which of the following would be included in the entry to replenish the fund?
debit various expenses $455; credit Cash $455
A petty cash fund was established with a $525 balance. It currently has cash of $70 and petty cash tickets as shown below: Travel expense $115 Office supplies expense 310 Equipment rental expense 30 Which of the following would be the journal entry to replenish the Petty Cash account?
debit to Cash Short & Over for $10
A petty cash fund was established with a $550 balance. It currently has cash of $35 and petty cash tickets as shown below: Travel expense $105 Office supplies expense 250 Equipment rental expense 150 Which of the following would be included in the journal entry to replenish the Petty Cash fund?
competent, reliable, and ethical personnel
Goldman Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard. The clerk has not yet been adequately trained on the maintenance needs of the equipment. Which internal control procedure needs strengthening?
There are outstanding checks.
In reconciling a bank statement, the bank balance is $2,100, and the checkbook balance is $2,001. Which of the following is the most probable reason for the bank balance being larger than the book balance?
A journal entry is needed to debit the Cash account and credit the Petty Cash account for $200.
Mercury Company established a petty cash fund with a $200 balance. Which of the following statements is incorrect?
those transactions have already been recorded in the company's journal
No journal entries are required for the reconciling items on the bank side because ________.
Cash 130,000 Sales Revenue 130,000 Credit Card Expense 5,200 Cash 5,200
On April 1, 2025, Barnes Services received a 9−month note for $14,000 at 11%.Calculate the amount of interest due at maturity. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
collusion
Two or more people working together to circumvent internal controls and defraud a company is known as ________.
Cash 13,689 Rent Expense 13,689
The bookkeeper of Wilson Electric Supply, Inc. recorded a $1,521 check as $15,210 in payment of the current month's rent. Which of the following journal entries is needed to adjust for this error in the books of the company?
assignment of responsibilities
The controller at Business Services Consulting needs new computers for the accounting department. However, there are no guidelines specifying whether the controller can approve purchases of office equipment. Which internal control procedure needs strengthening?
Debit the Petty Cash account and credit the Cash account for $300.
The petty cash fund has a current balance of $100, which is the established fund balance. Based on activity in the fund, it is determined that the balance needs to be changed to $400. Which journal entry is needed to make this change?
Cash 160,000 Sales Revenue 160,000 Credit Card Expense 6,400 Cash 6,400
Callie, Inc., a retailer, accepts payment through credit cards. During August, credit card sales amounted to $160,000. The processor charges a 4% fee. What is the correct journal entry or entries for credit card sales using the gross method?
Cash 144,000 Credit Card Expense 6,000 Sales Revenue 150,000
Conner, Inc., a retailer, accepts payment through credit cards. During August, credit card sales amounted to $150,000. The processor charges a 4% fee. What is the correct journal entry or entries for credit card sales assuming the net method?
