Accounting Test 3

Anyone can sign the checks

Which of the following is not a suggested procedure to establish internal control over cash disbursements?

The functions of record keeping and maintaining custody of cash should be combined

Which of the following is not an internal control activity for cash?

The same individual receives the cash and pays the bills

Which of the following is not an internal control procedure for cash?

deduction from the balance per books

A NSF check should appear in which section of the bank reconciliation?

added to the balance per books

A check was written by a company and incorrectly recorded by a company. On the bank reconciliation, the error should be

establishment of responsibility

Allowing only the treasurer to sign checks is an example of

only when there is an exchange transaction involving the purchase of an entire business

Goodwill can be recorded

goodwill is recorded as the excess of cost over the fair value of identifiable net assets

In recording the acquisition cost of an entire business

Keep inventory levels high and maintain idle cash

Which of the following is not a basic principle of cash management?

Segregation of duties

One bookkeeper prepares the cash deposits while the other bookkeeper enters the collections in the journal and ledger. Which of the following is the best explanation of this type of internal control principle over cash receipts?

independent internal verification

The reconciliation of the cash register tape with the cash in the register is an example of

documentation procedures

The use of prenumbered checks is an example of

The use of prenumbered checks

Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company's checkbook for subsequent misappropriation of funds?

The amount of cash on hand should be kept to a minimum

Which of the following is an appropriate internal control activity for cash?

Notes collected by the bank

Which of the following would be added to the balance per books on a bank reconciliation?