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accounts mcq-A $100 petty cash fund contains $89 in petty cash receipts, and $7.50 in currency and coins. The journal

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Question;Question 1A $100 petty cash fund contains $89 in petty cash receipts, and $7.50 in currency and coins. The journal entry to record the replenishment of the fund would include aAnswercredit to Petty Cash for $96.50.credit to Cash for $89.debit to Cash Short and Over for $3.50.credit to Cash Short and Over for $3.50.2 pointsQuestion 2A bank reconciliation should be preparedAnswerwhenever the bank refuses to lend the company money.to explain any difference between the company's balance per books with the balance per bank.when an employee is suspected of fraud.by the person who is authorized to sign checks.2 pointsQuestion 3A bank reconciliation should be prepared periodically becauseAnswerthe company's records and the bank's records are in agreementthe bank has not recorded all of its transactionsany 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 correctedthe bank must make sure that its records are correct2 pointsQuestion 4A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. This item would be included on the bank reconciliation as a(n)Answeraddition to the balance per the company's recordsaddition to the balance per the bank statementdeduction from the balance per the bank statementdeduction from the balance per the company's records2 pointsQuestion 5A check drawn by a company for $270 in payment of a liability was recorded in the journal as $720. What entry is required in the company's accounts?Answerdebit Accounts Payable, credit Cashdebit Cash, credit Accounts Receivabledebit Cash, credit Accounts Payabledebit Accounts Receivable, credit Cash2 pointsQuestion 6A debit or credit memo describing entries in the company's bank account may be enclosed with the bank statement. An example of a credit memo isAnswerdeposited checks returned for insufficient fundsa promissory note left for collectiona service chargenotification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket2 pointsQuestion 7A firm's internal control environment is not influenced byAnswermanagement's operating styleorganizational structurepersonnel policiesmonitoring policies2 pointsQuestion 8A minimum cash balance required by a bank is calledAnswercash in bankcash equivalentcompensating balanceEFT2 pointsQuestion 9A necessary element of internal control isAnswerdatabasesystems designsystems analysisinformation and communication2 pointsQuestion 10A voucher is usually supported byAnswera supplier's invoicea purchase ordera receiving reportall of the above2 pointsQuestion 11Accompanying the bank statement was a credit memo for a short-term note collected by the bank for the company. This item is a(n)Answerdeduction from the balance per company's recordsaddition to the balance per bank statementdeduction from the balance per bank statementaddition to the balance per company's records2 pointsQuestion 12Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item isAnswera deduction from the balance per company's recordsan addition to the balance per bank statementa deduction from the balance per bank statementan addition to the balance per company's records2 pointsQuestion 13Accompanying the bank statement was a debit memo for an NSF check received from a customer. What entry is required in the company's accounts?Answerdebit Other Income, credit Cashdebit Cash, credit Other Incomedebit Cash, credit Accounts Receivabledebit Accounts Receivable, credit Cash2 pointsQuestion 14Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?Answerdebit Miscellaneous Administrative Expense, credit Cashdebit Cash, credit Other Incomedebit Cash, credit Accounts Payabledebit Accounts Payable, credit Cash2 pointsQuestion 15Cash equivalentsAnswerare illegal in some stateswill be converted to cash within two yearswill be converted to cash within 90 dayswill be converted to cash within 120 days2 pointsQuestion 16During 2010, Tempo Inc has monthly cash expenses of $120,000. On December 31, 2010, their cash balance is $1,860,000. The ratio of cash to monthly cash expenses isAnswer6.515.577.412.02 pointsQuestion 17During a bank reconciliation process,AnswerOutstanding checks and deposits in transit are added to the bank statement balance.Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.Outstanding checks and deposits in transit are subtracted from the bank statement balance.Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.2 pointsQuestion 18Internal control does not consist of policies and procedures thatAnswerprotect assets from misuseaid management in directing operations toward achieving business goalsguarantee the company will not go bankruptensure that business information is accurate2 pointsQuestion 19The objectives of internal control are toAnswercontrol the internal organization of the accounting department personnel and equipmentprovide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied withprevent fraud, and promote the social interest of the companyprovide control over "internal-use only" reports and employee internal conduct2 pointsQuestion 20The type of account and normal balance of Petty Cash is a(n)Answerrevenue, creditasset, debitliability, creditexpense, debit2 pointsQuestion 21Which of the following is not an internal control activity for cash?AnswerThe number of persons who have access to cash should be limited.All cash receipts should be recorded promptly.The functions of record keeping and maintaining custody of cash should be combined.Surprise audits of cash on hand should be made occasionally.2 pointsQuestion 22Which one of the following below reflects a weak internal control system?Answerall employees are well superviseda single employee is responsible for comparing a receiving report to an invoiceall employees must take their vacationsa single employee is responsible for collecting and recording of cash2 pointsQuestion 23Journal entries based on the bank reconciliation are required in the company's accounts forAnsweroutstanding checksdeposits in transitbank errorsbook errors2 pointsQuestion 24The amount of the outstanding checks is included on the bank reconciliation as a(n)Answerdeduction from the balance per company's recordsaddition to the balance per bank statementdeduction from the balance per bank statementaddition to the balance per company's records2 pointsQuestion 25The debit balance in Cash Short and Over at the end of an accounting period is reported asAnsweran expense on the income statementincome on the income statementan asset on the balance sheeta liability on the balance sheet

 

Paper#43583 | Written in 18-Jul-2015

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