acc ch 8 video, hw, quiz
debit petty cash, credit cash
1. A petty cash fund of $500 is established on October 1. The entry to record the transaction is _____.
debited
1. If there is a cash shortage, the cash short and over account is
d
1. The five elements of internal control include all of the following except _____. a. risk assessment. b. control procedures. c. information and communication. d. framework procedures
deducted from the bank balance
1. When preparing a bank reconciliation, outstanding checks are _____.
voucher
2. A __________ is any document that serves as proof of authority to pay cash or issue an electronic funds transfer.
a credit to cash account
2. Replenishing the petty cash fund requires _____.
deducted from the company's cash balance
2. When preparing a bank reconciliation, a not sufficient funds (NSF) check is _____.
b
"To maintain public confidence and trust in the financial reporting of companies" is the purpose of a. the IRS b. Sarbanes-Oxley c. the FASB d. GAAP
a
A bank reconciliation should be prepared periodically because a. any differences between the company's records and the bank's records should be determined, and any errors made by either party should be discovered and corrected b. the bank must make sure that its records are correct c. the company's records and the bank's records are in agreement d. the bank has not recorded all of its transactions
c
A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. This item would be included on the bank reconciliation as a(n) a. deduction from the balance per the bank statement b. deduction from the balance per the company's records c. addition to the balance per the company's records d. addition to the balance per the bank statement
c
A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts? a. debit Cash; credit Accounts Receivable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Accounts Payable d. debit Accounts Payable; credit Cash
a
A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would be included in the bank reconciliation as a(n) a. deduction from the balance per the company's records b. addition to the balance per the company's records c. addition to the balance per the bank statement d. deduction from the balance per the bank statement
$19,000
A company has the following current assets: Cash, $10,000 Commercial paper, $5,000 Treasury bills, $4,000 Accounts receivable, $10,000 Inventory, $20,000 What is the total amount of cash and cash equivalents?
d
A necessary element of internal control is a. a database b. systems analysis c. systems design d. information and communication
d
A voucher is usually supported by a. a purchase order b. a supplier's invoice c. a receiving report d. All of these choices
c
Credit memos from the bank a. show that a company has deposited a customer's NSF check b. decrease a bank customer's account c. show that the bank has collected a note receivable for the customer d. are used to show a bank service charge
b
Sarbanes-Oxley applies to a. not-for-profit organizations b. publicly held companies c. privately held businesses d. All of these choices
d
The cash account in the company's ledger is a(n) a. liability with a normal debit balance b. asset with a normal credit balance c. liability with a normal credit balance d. asset with a normal debit balance
c
The debit balance in Cash Short and Over at the end of an accounting period is reported as a. an asset on the balance sheet b. a liability on the balance sheet c. an expense on the income statement d. income on the income statement
electronic funds transfer.
The initials EFT stand for
b
The purpose of the __________ is to maintain public confidence and trust in the financial reporting of companies. A) Sherman Antitrust Act B) Sarbanes-Oxley Act C) Accounting Reformation Act D) Internal Control Act of 2002
a
The ratio of cash to monthly cash expenses is computed as _____. a- cash as of year-end divided by monthly cash expenses b- beginning cash balance divided by ending cash balance c- cash and cash equivalents divided by cash as of year-end d- None of these choices are correct.
c
What entry is required in the company's accounts to record outstanding checks? a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. no entry required d. debit Cash; credit Accounts Receivable
a
When there are major changes in a company's strategy, business structure, or operations, evaluations of controls are usually performed by a. internal auditors b. external auditors c. the Securities and Exchange Commission d. senior management
cash
Where are cash equivalents disclosed in the financial statements? _____ account on the balance sheet.
d
Which of the following is NOT a reason for which a bank issues debit memos? A) Service charges B) Customer checks returned for insufficient funds C) Payments made by electronic funds transfer D) Interest earned on the company's account
d
Which of the following is an advantage of using bank accounts? A) Bank accounts reduce the amount of cash on hand. B) The use of bank accounts facilitates the transfer of funds using EFT systems. C) Bank accounts provide an independent recording of cash transactions that can be compared to the company's recording of cash transactions. D) All of these choices are correct.
a
Which of the following is not a factor that influences a business's control environment? a. proofs and security measures b. management's philosophy and operating style c. personnel policies d. organizational structure
d
Which of the following items that appeared on the bank reconciliation did not require a journal entry? a. bank service charges b. NSF checks c. a check for $630, recorded in the check register for $360 d. deposits in transit
c
Which of the following reflects a weak internal control system? a. All employees must take their vacations. b. All employees are well supervised. c. A single employee is responsible for collecting and recording cash. d. A single employee is responsible for comparing a receiving report to an invoice.
a
Which of the following would be subtracted from the balance per bank on a bank reconciliation? a. outstanding checks b. service charges c. deposits in transit d. notes collected by the bank
b
Which of these adds security to a smartphone for mobile payments? A) Have a hard-to-copy password. B) Use a fingerprint log-in. C) Use someone else's smartphone for payments. D) Have two phones, one used only for payments.
a
An element of internal control is a. risk assessment b. controlling accounts c. journals d. subsidiary ledgers
c
During the year, Tempo Inc. has monthly cash expenses of $115,000. On December 31, its cash balance is $1,437,500. The ratio of cash to monthly cash expenses is a. 11.5 months b. 8.0 months c. 12.5 months d. 87.5 months
d
Examples of cash equivalents include all of the following except A) U.S. Treasury bills. B) notes issued by major corporations (referred to as commercial paper). C) currency and coins. D) long-term notes receivable.
39 months
Financial data for a company is provided below: -Cash, end of year, $500,000 -Estimation of yearly cash expenses from negative cash flows from operations on statement of cash flows, $(155,000) -Cash, beginning of year, $400,000 -Accounts receivable, $10,000 -Inventory, $20,000 -Net Income for the year How many months will the company be able to continue without positive cash flows or additional financing (round to nearest whole month)? - 12 months - 25 months - 39 months - 16 months
d
Internal control is defined as the procedures and processes used by a company to _____. a. safeguard its assets. b. process information accurately. c. ensure compliance with laws and regulations. d. All of these are correct.
d
Journal entries based on the bank reconciliation are required in the company's accounts for a. deposits in transit b. outstanding checks c. bank errors d. book errors
c
Monitoring the internal control system can be best described as _____. a. the concept of separating responsibilities for related operations b. implementing proofs and security measures c. the process by which a company locates weaknesses and improves controls d. separating operations, custody of assets, and accounting
a
Question Content Area A $150 petty cash fund has cash of $54 and receipts of $83. The journal entry to replenish the account would include a a. debit to Cash Short and Over for $13 b. credit to Cash for $54 c. credit to Petty Cash for $29 d. debit to Cash for $83
a
Question Content Area A bank reconciliation should be prepared a. to explain any difference between the balance per company records with the balance per bank records b. by the person who is authorized to sign checks c. by the company's bank d. whenever the bank refuses to lend the company money
c
Question Content Area Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n) a. deduction from the balance per bank statement b. addition to the balance per bank statement c. addition to the balance per company's records d. deduction from the balance per company's records
b
Question Content Area During a bank reconciliation process, a. outstanding checks and deposits in transit are subtracted from the bank statement balance b. outstanding checks are subtracted and deposits in transit are added to the bank statement balance c. outstanding checks are added and deposits in transit are subtracted from the bank statement balance d. outstanding checks and deposits in transit are added to the bank statement balance
b
Question Content Area EFT a. makes it easier to document purchase and sale transactions b. can process certain cash transactions at less cost than using the mail would incur c. means efficient funds transfer d. means effective funds transfer
d
Question Content Area In the normal operation of business, you receive a check from a customer and deposit it into your checking account. With your bank statement, you are advised that this check for $775 is "NSF." The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will a. add both values to the cash balance according to the bank statement b. subtract both values from the cash balance according to the bank statement c. add both values to the cash balance according to the company's records d. subtract both values from the cash balance according to the company's records
c
Question Content Area Internal control does not consist of policies and procedures that a. ensure that business information is accurate b. protect assets from misuse c. guarantee the company will earn a profit d. ensure employees and managers comply with laws and regulations
b
Question Content Area The amount of the outstanding checks is included on the bank reconciliation as a(n) a. addition to the balance per company's records b. deduction from the balance per bank statement c. deduction from the balance per company's records d. addition to the balance per bank statement
a
Question Content Area The type of account and normal balance of Petty Cash is a(n) a. asset, debit b. liability, credit c. revenue, credit d. expense, debit
