Question 1

A company established a $400 petty cash fund by issuing a check to the custodian on October 1. On October 15, the petty cash fund was replenished and increased to $1,000 in total. The contents of the petty cash fund at the time of the October 15 replenishment were:
Prepare the general journal entry to record both the reimbursement and the increase of the petty fund on October 15.

Accepted Answer

The answer of A company established a $400 petty cash...

Question 2

List the principles of internal control.

Accepted Answer

Principles of internal control include t...

Question 3

A company established a petty cash fund in April of the current year and experienced the following transactions affecting the fund during April. Prepare journal entries to establish the fund on April 1, to replenish it on April 25, and to record the increase in the fund on April 25.

Accepted Answer

The answer of A company established a petty cash fund...

Question 4

The days' sales uncollected ratio is used to:

Accepted Answer

A)   Measure how many days of sales remain until the end of the year.
B)   Determine the number of days that have passed without collecting on accounts receivable.
C)   Identify the likelihood of collecting sales on account.
D)   Estimate how much time is likely to pass before the amount of accounts receivable is received in cash.
E)   Measure the amount of layaway sales for a period.F) A) and B)
G) B) and E)

Question 5

In reimbursing the petty cash fund:

Accepted Answer

A)   Cash is debited.
B)   Petty Cash is credited.
C)   Petty Cash is debited.
D)   Appropriate expense accounts are debited.
E)   No expenses are recorded.F) C) and D)
G) B) and D)

Question 6

A key factor in a voucher system is:

Accepted Answer

A)   Only approved departments and individuals are authorized to incur an obligation that will result in the payment of cash.
B)   Procedures for purchasing, receiving and paying for merchandise are divided among several departments.
C)   The system limits the individuals that can incur cash payment obligations for a company.
D)   It should be extended to all expenses.
E)   All of these.F) D) and E)
G) B) and C)

Question 7

It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash.

Accepted Answer

A) True 
 B)False

Question 8

A ____________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Accepted Answer

The answer of A ____________ is a report explaining any...

Question 9

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Accepted Answer

The answer of _______________________ are deposits made and recorded by...

Question 10

A remittance advice is:

Accepted Answer

A)   An explanation for a payment by check.
B)   A bank statement.
C)   A voucher.
D)   An EFT.
E)   A cancelled check.F) A) and B)
G) A) and C)

Question 11

The number of days' sales uncollected:

Accepted Answer

A)   Measures how much time is likely to pass before the current amount of accounts receivable is received in cash.
B)   Can be used for comparisons to other companies in the same industry.
C)   Can be used for comparisons between current and prior periods.
D)   Reflects the liquidity of receivables.
E)   All of these.F) B) and D)
G) A) and E)

Question 12

Dylan Lauren of Dylan's Candy Bar knew good business practice requires the use of effective internal controls. Identify some of the internal controls that Dylan's Candy Bar implemented and explain how those controls contributed to the firm's success.

Accepted Answer

Some of the control procedures that were...

Question 13

Effective cash management involves applying all of the following cash management principles except:

Accepted Answer

A)   Encourage collection of receivables, offer discounts for payments received early.
B)   Keep only necessary levels of assets.
C)   Plan expenditures.
D)   Leave excess cash available for unexpected expenditures.
E)   Delay payment of liabilities until the last possible day.F) A) and D)
G) A) and C)

Question 14

The following information is available for Johnson Manufacturing Company at June 30: Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

Accepted Answer

A)   $15,062
B)   $20,146
C)   $20,072
D)   $19,205
E)   $19,462F) All of the above
G) B) and D)

Question 15

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Accepted Answer

A) True 
 B)False

Question 16

A _____________________________ fund is used for the control of small amounts of cash disbursements.

Accepted Answer

The answer of A _____________________________ fund is used for the...

Question 17

On a bank reconciliation, the amount of an unrecorded bank service charge should be:

Accepted Answer

A)   Added to the book balance of cash.
B)   Deducted from the book balance of cash.
C)   Added to the bank balance of cash.
D)   Deducted from the bank balance of cash.
E)   Noted in memorandum form only.F) D) and E)
G) All of the above

Question 18

A company had the following transactions during January:
Using the net method of recording purchases, prepare the journal entries to record these January transactions.

Accepted Answer

The answer of A company had the following transactions during...

Question 19

Basic bank services include:

Accepted Answer

A)   Bank accounts.
B)   Bank deposits.
C)   Checking.
D)   Electronic funds transfer.
E)   All of these.F) A) and B)
G) A) and C)

Question 20

The document the purchasing department sends to the vendor that is used to place an order is the _________________________.

Accepted Answer

The answer of The document the purchasing department sends to...

Exam 8: Cash and Internal Controls

The days' sales uncollected ratio is used to:

Correct Answer
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Correct Answer
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The number of days' sales uncollected:

Correct Answer
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A key factor in a voucher system is:

Correct Answer
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_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct Answer
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A company established a petty cash fund in April of the current year and experienced the following transactions affecting the fund during April. Prepare journal entries to establish the fund on April 1, to replenish it on April 25, and to record the increase in the fund on April 25.

Correct Answer
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List the principles of internal control.

Correct Answer
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Principles of internal control include t...
View Answer

The following information is available for Johnson Manufacturing Company at June 30: Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

Correct Answer
verified

A ____________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Correct Answer
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On a bank reconciliation, the amount of an unrecorded bank service charge should be:

Correct Answer
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In reimbursing the petty cash fund:

Correct Answer
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Dylan Lauren of Dylan's Candy Bar knew good business practice requires the use of effective internal controls. Identify some of the internal controls that Dylan's Candy Bar implemented and explain how those controls contributed to the firm's success.

Correct Answer
verified
Some of the control procedures that were...
View Answer

A _____________________________ fund is used for the control of small amounts of cash disbursements.

Correct Answer
verified

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Correct Answer
verified

Effective cash management involves applying all of the following cash management principles except:

Correct Answer
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Basic bank services include:

Correct Answer
verified

The document the purchasing department sends to the vendor that is used to place an order is the _________________________.

Correct Answer
verified

It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash.

Correct Answer
verified

A company had the following transactions during January: Using the net method of recording purchases, prepare the journal entries to record these January transactions.

Correct Answer
verified

A remittance advice is:

Correct Answer
verified

Exam 8: Cash and Internal Controls

The days' sales uncollected ratio is used to:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The number of days' sales uncollected:

Correct AnswerverifiedShow Answer

A key factor in a voucher system is:

Correct AnswerverifiedShow Answer

_______________________ are deposits made and recorded by the depositor but not yet recorded on the bank statement.

Correct AnswerverifiedShow Answer

A company established a petty cash fund in April of the current year and experienced the following transactions affecting the fund during April. Prepare journal entries to establish the fund on April 1, to replenish it on April 25, and to record the increase in the fund on April 25.

Correct AnswerverifiedShow Answer

List the principles of internal control.

Correct AnswerverifiedPrinciples of internal control include t...View AnswerShow Answer

The following information is available for Johnson Manufacturing Company at June 30: Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:

Correct AnswerverifiedShow Answer

A ____________ is a report explaining any differences between the checking account balance according to the depositor's records and the balance reported on the bank statement.

Correct AnswerverifiedShow Answer

On a bank reconciliation, the amount of an unrecorded bank service charge should be:

Correct AnswerverifiedShow Answer

In reimbursing the petty cash fund:

Correct AnswerverifiedShow Answer

Dylan Lauren of Dylan's Candy Bar knew good business practice requires the use of effective internal controls. Identify some of the internal controls that Dylan's Candy Bar implemented and explain how those controls contributed to the firm's success.

Correct AnswerverifiedSome of the control procedures that were...View AnswerShow Answer

A _____________________________ fund is used for the control of small amounts of cash disbursements.

Correct AnswerverifiedShow Answer

The entry to increase the balance in petty cash from $50 to $75 would include a credit to Petty Cash of $25.

Correct AnswerverifiedShow Answer

Effective cash management involves applying all of the following cash management principles except:

Correct AnswerverifiedShow Answer

Basic bank services include:

Correct AnswerverifiedShow Answer

The document the purchasing department sends to the vendor that is used to place an order is the _________________________.

Correct AnswerverifiedShow Answer

It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash.

Correct AnswerverifiedShow Answer

A company had the following transactions during January: Using the net method of recording purchases, prepare the journal entries to record these January transactions.

Correct AnswerverifiedShow Answer

A remittance advice is:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Principles of internal control include t...
View 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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Some of the control procedures that were...
View 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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