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aving one person responsible for the related activities of ordering merchandise, receiving
goods, and paying for them
1. To explain any difference between the depositors balance per books with the
balance per bank.
1. True
1. False
5. When two or more people get together for the purpose of circumventing prescribed
controls, it is called
1. Collusion.
1. Natural disasters
1. assets
12. Which of the following is not an internal control procedure for cash?
1. Payments should be made with cash.
13. Sams Grocery Store has the following policy: Only one cashier can have access to a
cash drawer. Which internal control principle supports this policy?
1. Establishment of responsibilities.
14. At Emerson Company, 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?
1. Segregation of duties.
15. Which of the following would not be included in the definition of cash?
1. Petty Cash
16. Adler Company developed the following reconciling information preparing its December
bank reconciliation. Using the above information, determine the cash balance per books
(before adjustments) for the Adler Company.
1. $4625
17. Which of the following would not be subtracted from the balance per books on bank
reconciliation?
1. Outstanding Checks
18. A NSF check should appear in which section of the bank reconciliation?
19. Which of the following would be deducted from the balance per books on bank
reconciliation?
1. Service Charges
20. In the month of November, Gavin Company Inc wrote checks in the amount of $27,750.
In December, check sin the amount of $37974 were written. In November, $25,404 of
these checks was presented to the bank for payment and $32, 649 in December. What is
the amount of outstanding checks at the end of December?
1. $7,671
21. Which of the following is an example of a bank reconciliation item that requires an
adjusting entry?
1. NSF CHECK
22. At April 30, Mendoza Company has the following bank information: What is Mendozas
adjusted cash balance on April 30?
1. 7,740
23. Russel Company assembled the following information in completing its March bank
reconciliation. As a result of this reconciliation, Russel will
24. While preparing the bank reconciliation, you notice that a check, written by the company
for $750, has been outstanding for 5 months. What is the best action for you to take?
25. At April 30, Kessler Company has the following bank information. What is Kesslers
adjusted cash balance on April 30?
1. $12,175
26. A basic principle of cash management is to increase the speed of paying liabilities.
1. False
1. Treasurer
28. Collier Company has implemented a just-in-time system, which relies on suppliers to
deliver goods for resale as needed. The implementation is most consistent with which of
the following basic principles of cash management?
1. True
31. Higgins Company gathered the following reconciling information in preparing its
October bank reconciliation. The adjusted cash balance per books on October 31 is
1. 14580
32. Two individuals at a retail store work the same cash register. You evaluate this situation
as
1. A violation of establishment of responsibility
33. The following information was taken from Mitchell Company cash budget for the Month
of July. If the company has a policy of maintaining end of the month cash balance of
$100,000, the amount the company would have to borrow is
1. 40,000
34. What is the rationale for the internal control principle, segregation of duties?
1. The work of one employee should without duplication of effort, provide a reliable
basis for evaluating the work of another employee
36. Joe is a warehouse custodian and also maintains the accounting record of the inventory
held at the warehouse. An assessment of this situation indicates
1. Evaluate the system of internal controls for the companies that employ them
38. The following information was taken from Hurlbert Company cash budget for the month
of June. If the company has a policy of maintaining end of the month cash balance of
$40,000, the amount the company would have to borrow is:
1. 10000
1. Outstanding checks
40. Expected direct materials purchase in Wade Company is $525,00 in the first quarter and
$675,000 in the second quarter. Forty percent of the purchases are paid in cash as
incurred, and the balance is paid in the follow quarter. The budgeted cash payments for
purchases in the second quarter are:
1. 585,000
41. The reconciliation of the cash register tape with the cash in the register is an example of