Accounting Final Exam (Exam #8)

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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?


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