Even complicated and confusing topics will be easily developed and covered if you request our help writing an essay. Place an order today!

61. Which of
the following is not one of the policies and procedures that make up an
internal control system?

A. Protect
assets.

B. Ensure
reliable accounting.

C. Guarantee
a return to investors.

D. Urge
adherence to company policies.

E. Promote
efficient operations.

62. Managers
place a high priority on internal control systems because the systems assist
managers in all of the following except:

A. Promoting
efficient operations.

B. Protecting
assets.

C. Urging
adherence to company policies.

D. Ensuring
reliable accounting.

E. Assuring
that no loss will occur.

63. The
principles of internal control include:

A. Separate
recordkeeping from custody of assets.

B. Maintain
minimal records.

C. Use only
computerized systems.

D. Bond all
employees.

E. Require
automated sales systems.

64. Principles
of internal control include all of the following except:

A. Apply
technological controls.

B. Maintaining
security by having one person track and record assets.

C. Perform
regular and independent reviews.

D. Separate
recordkeeping from custody of assets.

E. Divide
responsibilities for related transactions.

65. A properly
designed internal control system:

A. Lowers
the company’s risk of loss.

B. Insures
profitable operations.

C. Eliminates
the need for an audit.

D. Requires
the use of non-computerized systems.

E. Is not
necessary if the company uses a computerized system.

66. A
company’s internal control system:

A. Eliminates
the company’s risk of loss.

B. Monitors
company and employee performance.

C. Eliminates
human error.

D. Eliminates
the need for audits.

E. Eliminates
the need for managers’ certification of controls.

67. Two clerks
sharing the same cash register is a violation of which internal control
principle?

A. Establish
responsibilities.

B. Maintain
adequate records.

C. Insure
assets.

D. Bond key
employees.

E. Apply
technological controls.

68. Which
internal control principle prescribes the use of pre-numbered printed checks?

A. Technological
controls.

B. Maintain
adequate records.

C. Perform
regular and independent reviews.

D. Establish
responsibilities.

E. Divide
responsibility for related transactions.

69. The impact
of technology on internal controls includes:

A. Reduced
processing errors.

B. Elimination
of the need for regular audits.

C. Elimination
of the need to bond employees.

D. Elimination
of separation of duties.

E. Elimination
of fraud.

70. Internal
control policies and procedures have limitations not including:

A. Human
error.

B. Human
fraud.

C. Cost-benefit
principle.

D. Collusion.

E. Establishing
responsibilities.

71. Internal
control systems are:

A. Developed
by the Securities and Exchange Commission for public companies.

B. Developed
by the Small Business Administration for non-public companies.

C. Developed
by the Internal Revenue Service for all U.S. companies.

D. Required
by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock
is traded on an exchange.

E. Required
only if a company plans to engage in interstate commerce.

72. Cash, not
including cash equivalents, includes:

A. Postage
stamps.

B. Customer
checks, cashier checks, and money orders.

C. IOUs.

D. Two-year
certificates of deposit.

E. Money
market funds.

73. Cash
equivalents:

A. Are short-term,
highly liquid investment assets.

B. Include
6-month certificates of deposit.

C. Include
checking accounts.

D. Are
recorded in petty cash.

E. Include
money orders.

74. Cash
equivalents:

A. Include
savings accounts.

B. Include
checking accounts.

C. Are
readily converted to a known cash amount.

D. Include
time deposits.

E. Have no
immediate value.

75. Cash
equivalents meet all of the following criteria except:

A. Are
readily convertible to a known cash amount.

B. Include
short-term investments purchased within 3 months of their maturity dates.

C. Have a
market value that is not sensitive to interest rate changes.

D. Include
short-term U.S. treasury bills.

E. Are more
liquid than cash.

76. The
following information is available for Birch Company at December 31:

Money market fund balance $2,790
Certificate of deposit maturing June 30 of next year $10,000
Postdated checks from customers $1,475
Cash in bank account $21,430
NSF checks from customers returned by bank $650
Cash in petty cash fund$200
Inventory of postage stamps $24
U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year $5,000

Based on this
information, Birch Company should report Cash and Cash Equivalents on December
31 of:

A. $29,420

B. $41,345

C. $31,345

D. $39,420

E. $38,770

77. The
following information is available for Fenton Manufacturing Company at June 30:

Cash in bank account $11,455
Inventory of postage stamps $74
Money market fund balance $10,400
Petty cash balance $350
NSF checks from customers returned by bank $867
Postdated checks received from customers $791
Money orders $290
A nine-month certificate of deposit maturing on December 31
of current year $6,000

Based on this
information, Fenton Manufacturing Company should report Cash and Cash
Equivalents on June 30 of:

A. $28,495

B. $29,286

C. $23,286

D. $12,095

E. $22,495

78. The
following information is available for Montrose Company at December 31:

Cash in bank account $8,540
Petty cash 250
Money market fund balance $10,400
Checks from customers $1,350
NSF checks from customers returned by bank $805
Treasury bill maturing in 60 days $10,000
Money orders $290
A nine-month certificate of deposit maturing on March 31 of
next year $6,000

Based on this
information, the amounts considered Cash and Cash Equivalents, respectively on
December 31 are:

A. Cash
$10,430; Cash equivalents $20,400

B. Cash
$8,540; Cash equivalents $22,290

C. Cash
$8,790; Cash equivalents $26,400

D. Cash
$19,190; Cash equivalents $16,000

E. Cash
$11,235; Cash equivalents $26,400

79. Basic bank
services do not include:

A. Bank
accounts.

B. Bank deposits.

C. Checking.

D. Electronic
funds transfer.

E. Petty
cash management.

80. The three
parties involved with a check are:

A. The
writer, the cashier, and the bank.

B. The
maker, the payee, and the bank.

C. The
maker, the manager, and the payee.

D. The
bookkeeper, the payee, and the bank.

E. The
signer, the cashier, and the company.

81. A
remittance advice is a(n):

A. Explanation
for a payment by check.

B. Bank
statement.

C. Internal
voucher.

D. Electronic
funds transfer.

E. Cancelled
check.

82. A bank
statement provided by the bank includes:

A. A list of
outstanding checks.

B. A list of
petty cash amounts.

C. The
beginning and the ending balance of the depositor’s account.

D. A listing
of deposits in transit.

E. A
reconciliation to the depositor cash account.

83. A bank
does not issue a debit memorandum to notify the depositor of which of the
following?

A. All
withdrawals through an ATM.

B. A fee
assessed to the depositor’s account.

C. An
uncollectible check.

D. Periodic
payments arranged in advance, by a depositor.

E. A deposit
to their account.

84. Preparing
a bank reconciliation on a monthly basis is an example of:

A. Establishing
responsibility.

B. Separation
of duties.

C. Protecting
assets by proving the accuracy of cash records.

D. A
technological control.

E. Poor
internal control.

85. The number
of days’ sales uncollected:

A. Is used
to evaluate the liquidity of receivables.

B. Is
calculated by dividing accounts receivable by sales.

C. Measures
a company’s ability to pay its bills on time.

D. Measures
a company’s debt to income.

E. Is
calculated by dividing sales by accounts receivable.

86. The days’
sales uncollected ratio is used to:

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 current amount of accounts
receivable is received in cash.

E. Measure
the amount of cash sales during a period.

87. The number
of days’ sales uncollected is calculated by:

A. Dividing
accounts receivable by net sales.

B. Dividing
accounts receivable by net sales and multiplying by 365.

C. Dividing
net sales by accounts receivable.

D. Dividing
net sales by accounts receivable and multiplying by 365.

E. Multiplying
net sales by accounts receivable and dividing by 365.

88. All of the
following are true of the number of days’ sales uncollected ratio except:

A. Is most
effective in evaluating the cash sales of a company.

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. Measures
how much time is likely to pass before the current amount of accounts
receivable is received in cash.

89. A company
had net sales of $21,500 and ending accounts receivable of $2,700 for the
current period. Its days’ sales uncollected equals:

A. 8.0 days.

B. 58.9
days.

C. 45.8
days.

D. 7.4 days.

E. 45.2
days.

90. Freeman
Co. had net sales of $4.2 million and ending accounts receivable of $0.8
million. Its days’ sales uncollected equals:

A. 5.3 days.

B. 69.5
days.

C. 19.2
days.

D. 11.5
days.

E. 292 days.

91. The
following information is taken from Reagan Company’s December 31 balance sheet:

Cash and cash equivalents $8,419
Accounts receivable 70,422
Merchandise inventories 60,362
Prepaid expenses 4,100
Accounts payable $14,950
Notes payable 86,638
Other current liabilities 9,500

If net credit sales
for the current year were $612,000, the firm’s days’ sales uncollected for the
year is:

A. 60 days

B. 85 days

C. 42 days

D. 154 days

E. 70 days

92. An income
statement account that is used to record cash overages and cash shortages
arising from petty cash transactions or from errors in making change is
titled:

A. Cash
Lost.

B. Bank
Reconciliation.

C. Petty
Cash.

D. Cash Over
and Short.

E. Cash
Receivable.

93. A set of
procedures and approvals for verifying, approving and recording obligations for
eventual cash disbursement, and for issuing checks for payment only of
verified, approved, and recorded obligations is referred to as a(n):

A. Internal
cash system.

B. Petty
cash system.

C. Cash
disbursement system.

D. Voucher
system.

E. Cash
control system.

94. Internal
control procedures for cash receipts do not require that:

A. Custody
over cash is kept separate from its recordkeeping.

B. All
collections for sales are be received immediately upon making the sales.

C. Clerks
having access to cash in a cash register should not have access to the register
tape or file.

D. An
employee with no access to cash receipts should compare the total cash recorded
by the register with the record of cash receipts reported by the cashier.

E. Cash
sales should be recorded on a cash register at the time of each sale.

95. The Cash
Over and Short account:

A. Is used
when the cash account reports a credit balance.

B. Is used
to record the income effects of errors in making change and/or processing petty
cash transactions.

C. Is not
necessary in a computerized accounting system.

D. Can never
have a debit balance.

E. Can never
have a credit balance.

96. The
voucher system of control:

A. Is a set
of procedures and approvals designed to control cash receipts and the
acceptance of obligations.

B. Establishes
procedures for verifying, approving, and recording obligations for eventual
cash disbursement.

C. Establishes
procedures for receiving checks for the sale of verified, approved, and
recorded activities.

D. Applies
only when multiple purchases are made from the same supplier.

E. Is
required in large companies but not beneficial for small to mid-sized
companies.

97. A voucher
is an internal document or file:

A. Prepared
after an invoice is received.

B. Used as a
substitute for an invoice if the supplier fails to send one.

C. Used to
accumulate information needed to control cash disbursements and to ensure that
transactions are properly recorded.

D. Takes the
place of a bank check.

E. Prepared
before the company orders goods to make sure that all goods are being ordered
from an approved vendor list.

98. Which of
the following procedures would weaken control over cash receipts that arrive
through the mail?

A. After the
mail is opened, a list (in triplicate) of the money received is prepared with a
record of the sender’s name, the amount, and an explanation of why the money is
sent.

B. The bank
reconciliation is prepared by a person who does not handle cash or record cash
receipts.

C. For
safety, only one person should open the mail, and that person should
immediately deposit the cash received in the bank.

D. The
cashier deposits the money in the bank and the recordkeeper records the amounts
received in the accounting records.

E. The employees
handling the cash receipts are bonded.

99. At the end
of the day, the cash register’s record shows $1,050, but the count of cash in
the cash register is $1,055. The correct entry to record the cash sales
is:

A. Debit
Cash $1,055; Credit Sales $1,055.

B. Debit
Cash $1,055; credit Cash Over and Short $5; credit Sales $1,050.

C. Debit
Cash $1,050; credit Sales $1050.

D. Debit
Cash $1,050; debit Cash Over and Short $5; credit Sales $1,055.

E. Debit
Cash Over and Short $5; credit Sales $5.

100. At the end
of the day, the cash register tape shows $1,020 in cash sales but the count of
cash in the register is $1,035. The proper entry to account for this excess is:

A. Debit
Cash $1,020; credit Sales $1,020.

B. Debit
Cash $1,035; credit Sales $1,035.

C. Debit
Cash $1,035; credit Sales $1,020; credit Cash Over and Short $15.

D. Debit
Cash $1,020; debit Cash Over and Short for $15; credit Sales $1,035.

E. Debit
Cash Over and Short $15; credit Cash $15.

101. A key
factor in a voucher system includes all of the following except:

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 is
applied to purchases of merchandise inventory and all other expenses.

E. It is not
necessary if the supplier provides both receiving report and invoice with the
merchandise shipped.

102. The entry
to establish a petty cash fund includes:

A. A debit
to Cash and a credit to Petty Cash.

B. A debit
to Cash and a credit to Cash Over and Short.

C. A debit
to Petty Cash and a credit to Cash.

D. A debit
to Petty Cash and a credit to Accounts Receivable.

E. A debit
to Cash and a credit to Petty Cash Over and Short.

103. Ferguson
Co. decides to establish a petty cash fund with a beginning balance of $200.
The company decides that any purchase under $25 can be processed through petty
cash instead of the voucher system. The journal entry to record establishing
the account is:

A. Debit
Cash $200 and credit Petty Cash $200.

B. Debit
Cash $200 and credit Cash Over and Short $200.

C. Debit
Petty Cash $200 and credit Cash $200.

D. Debit
Petty Cash $200; credit Cash $175; and credit Cash Over and Short $25.

E. Debit
Cash $200 and credit Petty Cash Over and Short $200.

104. The entry
to record reimbursement of the petty cash fund for postage expense should
include:

A. A debit
to Postage Expense.

B. A debit
to Petty Cash.

C. A debit
to Cash.

D. A debit
to Cash Short and Over.

E. A debit
to Supplies.

105. Ferguson
Co. has a $200 petty cash fund. At the end of the first month the accumulated
receipts represent $43 for delivery expenses, $127 for merchandise inventory,
and $12 for miscellaneous expenses. The fund has a balance of $18. The journal
entry to record the reimbursement of the account includes a:

A. Debit to
Petty Cash for $200.

B. Debit to
Cash Over and Short for $18.

C. Credit to
Cash for $182.

D. Credit to
Inventory for $127.

E. Credit to
Cash Over and Short for $18.

106. When a
petty cash fund is in use:

A. Expenses
paid with petty cash are recorded when the fund is replenished.

B. Petty
Cash is debited when funds are replenished.

C. Petty
Cash is credited when funds are replenished.

D. Expenses
are not recorded.

E. Cash is
debited when funds are replenished.

107. When
reimbursing the petty cash fund:

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.

108. Assume that
the custodian of a $450 petty cash fund has $64.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $379.50.

B. A credit
to Cash Over and Short for $3.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $385.50.

E. A debit
to Cash for $385.50.

109. Assume that
the custodian of a $450 petty cash fund has $62.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $377.50.

B. A debit
to Cash Over and Short for $5.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $382.50.

E. A debit
to Cash for $387.50.

110. A company
wants to decrease its $200 petty cash fund to $175. The entry to reduce the
fund is:

A. Debit
Cash Over and Short for $25; credit Petty Cash $25.

B. Debit to
Cash $25; credit Petty Cash $25.

C. Debit
Miscellaneous Expenses $25; credit Cash $25.

D. Debit
Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.

E. Debit
Petty Cash $25; credit Cash $25.

61. Which of
the following is not one of the policies and procedures that make up an
internal control system?

A. Protect
assets.

B. Ensure
reliable accounting.

C. Guarantee
a return to investors.

D. Urge
adherence to company policies.

E. Promote
efficient operations.

62. Managers
place a high priority on internal control systems because the systems assist
managers in all of the following except:

A. Promoting
efficient operations.

B. Protecting
assets.

C. Urging
adherence to company policies.

D. Ensuring
reliable accounting.

E. Assuring
that no loss will occur.

63. The
principles of internal control include:

A. Separate
recordkeeping from custody of assets.

B. Maintain
minimal records.

C. Use only
computerized systems.

D. Bond all
employees.

E. Require
automated sales systems.

64. Principles
of internal control include all of the following except:

A. Apply
technological controls.

B. Maintaining
security by having one person track and record assets.

C. Perform
regular and independent reviews.

D. Separate
recordkeeping from custody of assets.

E. Divide
responsibilities for related transactions.

65. A properly
designed internal control system:

A. Lowers
the company’s risk of loss.

B. Insures
profitable operations.

C. Eliminates
the need for an audit.

D. Requires
the use of non-computerized systems.

E. Is not
necessary if the company uses a computerized system.

66. A
company’s internal control system:

A. Eliminates
the company’s risk of loss.

B. Monitors
company and employee performance.

C. Eliminates
human error.

D. Eliminates
the need for audits.

E. Eliminates
the need for managers’ certification of controls.

67. Two clerks
sharing the same cash register is a violation of which internal control
principle?

A. Establish
responsibilities.

B. Maintain
adequate records.

C. Insure
assets.

D. Bond key
employees.

E. Apply
technological controls.

68. Which
internal control principle prescribes the use of pre-numbered printed checks?

A. Technological
controls.

B. Maintain
adequate records.

C. Perform
regular and independent reviews.

D. Establish
responsibilities.

E. Divide
responsibility for related transactions.

69. The impact
of technology on internal controls includes:

A. Reduced
processing errors.

B. Elimination
of the need for regular audits.

C. Elimination
of the need to bond employees.

D. Elimination
of separation of duties.

E. Elimination
of fraud.

70. Internal
control policies and procedures have limitations not including:

A. Human
error.

B. Human
fraud.

C. Cost-benefit
principle.

D. Collusion.

E. Establishing
responsibilities.

71. Internal
control systems are:

A. Developed
by the Securities and Exchange Commission for public companies.

B. Developed
by the Small Business Administration for non-public companies.

C. Developed
by the Internal Revenue Service for all U.S. companies.

D. Required
by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock
is traded on an exchange.

E. Required
only if a company plans to engage in interstate commerce.

72. Cash, not
including cash equivalents, includes:

A. Postage
stamps.

B. Customer
checks, cashier checks, and money orders.

C. IOUs.

D. Two-year
certificates of deposit.

E. Money
market funds.

73. Cash
equivalents:

A. Are short-term,
highly liquid investment assets.

B. Include
6-month certificates of deposit.

C. Include
checking accounts.

D. Are
recorded in petty cash.

E. Include
money orders.

74. Cash
equivalents:

A. Include
savings accounts.

B. Include
checking accounts.

C. Are
readily converted to a known cash amount.

D. Include
time deposits.

E. Have no
immediate value.

75. Cash
equivalents meet all of the following criteria except:

A. Are
readily convertible to a known cash amount.

B. Include
short-term investments purchased within 3 months of their maturity dates.

C. Have a
market value that is not sensitive to interest rate changes.

D. Include
short-term U.S. treasury bills.

E. Are more
liquid than cash.

76. The
following information is available for Birch Company at December 31:

Money market fund balance $2,790
Certificate of deposit maturing June 30 of next year $10,000
Postdated checks from customers $1,475
Cash in bank account $21,430
NSF checks from customers returned by bank $650
Cash in petty cash fund$200
Inventory of postage stamps $24
U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year $5,000

Based on this
information, Birch Company should report Cash and Cash Equivalents on December
31 of:

A. $29,420

B. $41,345

C. $31,345

D. $39,420

E. $38,770

77. The
following information is available for Fenton Manufacturing Company at June 30:

Cash in bank account $11,455
Inventory of postage stamps $74
Money market fund balance $10,400
Petty cash balance $350
NSF checks from customers returned by bank $867
Postdated checks received from customers $791
Money orders $290
A nine-month certificate of deposit maturing on December 31
of current year $6,000

Based on this
information, Fenton Manufacturing Company should report Cash and Cash
Equivalents on June 30 of:

A. $28,495

B. $29,286

C. $23,286

D. $12,095

E. $22,495

78. The
following information is available for Montrose Company at December 31:

Cash in bank account $8,540
Petty cash 250
Money market fund balance $10,400
Checks from customers $1,350
NSF checks from customers returned by bank $805
Treasury bill maturing in 60 days $10,000
Money orders $290
A nine-month certificate of deposit maturing on March 31 of
next year $6,000

Based on this
information, the amounts considered Cash and Cash Equivalents, respectively on
December 31 are:

A. Cash
$10,430; Cash equivalents $20,400

B. Cash
$8,540; Cash equivalents $22,290

C. Cash
$8,790; Cash equivalents $26,400

D. Cash
$19,190; Cash equivalents $16,000

E. Cash
$11,235; Cash equivalents $26,400

79. Basic bank
services do not include:

A. Bank
accounts.

B. Bank deposits.

C. Checking.

D. Electronic
funds transfer.

E. Petty
cash management.

80. The three
parties involved with a check are:

A. The
writer, the cashier, and the bank.

B. The
maker, the payee, and the bank.

C. The
maker, the manager, and the payee.

D. The
bookkeeper, the payee, and the bank.

E. The
signer, the cashier, and the company.

81. A
remittance advice is a(n):

A. Explanation
for a payment by check.

B. Bank
statement.

C. Internal
voucher.

D. Electronic
funds transfer.

E. Cancelled
check.

82. A bank
statement provided by the bank includes:

A. A list of
outstanding checks.

B. A list of
petty cash amounts.

C. The
beginning and the ending balance of the depositor’s account.

D. A listing
of deposits in transit.

E. A
reconciliation to the depositor cash account.

83. A bank
does not issue a debit memorandum to notify the depositor of which of the
following?

A. All
withdrawals through an ATM.

B. A fee
assessed to the depositor’s account.

C. An
uncollectible check.

D. Periodic
payments arranged in advance, by a depositor.

E. A deposit
to their account.

84. Preparing
a bank reconciliation on a monthly basis is an example of:

A. Establishing
responsibility.

B. Separation
of duties.

C. Protecting
assets by proving the accuracy of cash records.

D. A
technological control.

E. Poor
internal control.

85. The number
of days’ sales uncollected:

A. Is used
to evaluate the liquidity of receivables.

B. Is
calculated by dividing accounts receivable by sales.

C. Measures
a company’s ability to pay its bills on time.

D. Measures
a company’s debt to income.

E. Is
calculated by dividing sales by accounts receivable.

86. The days’
sales uncollected ratio is used to:

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 current amount of accounts
receivable is received in cash.

E. Measure
the amount of cash sales during a period.

87. The number
of days’ sales uncollected is calculated by:

A. Dividing
accounts receivable by net sales.

B. Dividing
accounts receivable by net sales and multiplying by 365.

C. Dividing
net sales by accounts receivable.

D. Dividing
net sales by accounts receivable and multiplying by 365.

E. Multiplying
net sales by accounts receivable and dividing by 365.

88. All of the
following are true of the number of days’ sales uncollected ratio except:

A. Is most
effective in evaluating the cash sales of a company.

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. Measures
how much time is likely to pass before the current amount of accounts
receivable is received in cash.

89. A company
had net sales of $21,500 and ending accounts receivable of $2,700 for the
current period. Its days’ sales uncollected equals:

A. 8.0 days.

B. 58.9
days.

C. 45.8
days.

D. 7.4 days.

E. 45.2
days.

90. Freeman
Co. had net sales of $4.2 million and ending accounts receivable of $0.8
million. Its days’ sales uncollected equals:

A. 5.3 days.

B. 69.5
days.

C. 19.2
days.

D. 11.5
days.

E. 292 days.

91. The
following information is taken from Reagan Company’s December 31 balance sheet:

Cash and cash equivalents $8,419
Accounts receivable 70,422
Merchandise inventories 60,362
Prepaid expenses 4,100
Accounts payable $14,950
Notes payable 86,638
Other current liabilities 9,500

If net credit sales
for the current year were $612,000, the firm’s days’ sales uncollected for the
year is:

A. 60 days

B. 85 days

C. 42 days

D. 154 days

E. 70 days

92. An income
statement account that is used to record cash overages and cash shortages
arising from petty cash transactions or from errors in making change is
titled:

A. Cash
Lost.

B. Bank
Reconciliation.

C. Petty
Cash.

D. Cash Over
and Short.

E. Cash
Receivable.

93. A set of
procedures and approvals for verifying, approving and recording obligations for
eventual cash disbursement, and for issuing checks for payment only of
verified, approved, and recorded obligations is referred to as a(n):

A. Internal
cash system.

B. Petty
cash system.

C. Cash
disbursement system.

D. Voucher
system.

E. Cash
control system.

94. Internal
control procedures for cash receipts do not require that:

A. Custody
over cash is kept separate from its recordkeeping.

B. All
collections for sales are be received immediately upon making the sales.

C. Clerks
having access to cash in a cash register should not have access to the register
tape or file.

D. An
employee with no access to cash receipts should compare the total cash recorded
by the register with the record of cash receipts reported by the cashier.

E. Cash
sales should be recorded on a cash register at the time of each sale.

95. The Cash
Over and Short account:

A. Is used
when the cash account reports a credit balance.

B. Is used
to record the income effects of errors in making change and/or processing petty
cash transactions.

C. Is not
necessary in a computerized accounting system.

D. Can never
have a debit balance.

E. Can never
have a credit balance.

96. The
voucher system of control:

A. Is a set
of procedures and approvals designed to control cash receipts and the
acceptance of obligations.

B. Establishes
procedures for verifying, approving, and recording obligations for eventual
cash disbursement.

C. Establishes
procedures for receiving checks for the sale of verified, approved, and
recorded activities.

D. Applies
only when multiple purchases are made from the same supplier.

E. Is
required in large companies but not beneficial for small to mid-sized
companies.

97. A voucher
is an internal document or file:

A. Prepared
after an invoice is received.

B. Used as a
substitute for an invoice if the supplier fails to send one.

C. Used to
accumulate information needed to control cash disbursements and to ensure that
transactions are properly recorded.

D. Takes the
place of a bank check.

E. Prepared
before the company orders goods to make sure that all goods are being ordered
from an approved vendor list.

98. Which of
the following procedures would weaken control over cash receipts that arrive
through the mail?

A. After the
mail is opened, a list (in triplicate) of the money received is prepared with a
record of the sender’s name, the amount, and an explanation of why the money is
sent.

B. The bank
reconciliation is prepared by a person who does not handle cash or record cash
receipts.

C. For
safety, only one person should open the mail, and that person should
immediately deposit the cash received in the bank.

D. The
cashier deposits the money in the bank and the recordkeeper records the amounts
received in the accounting records.

E. The employees
handling the cash receipts are bonded.

99. At the end
of the day, the cash register’s record shows $1,050, but the count of cash in
the cash register is $1,055. The correct entry to record the cash sales
is:

A. Debit
Cash $1,055; Credit Sales $1,055.

B. Debit
Cash $1,055; credit Cash Over and Short $5; credit Sales $1,050.

C. Debit
Cash $1,050; credit Sales $1050.

D. Debit
Cash $1,050; debit Cash Over and Short $5; credit Sales $1,055.

E. Debit
Cash Over and Short $5; credit Sales $5.

100. At the end
of the day, the cash register tape shows $1,020 in cash sales but the count of
cash in the register is $1,035. The proper entry to account for this excess is:

A. Debit
Cash $1,020; credit Sales $1,020.

B. Debit
Cash $1,035; credit Sales $1,035.

C. Debit
Cash $1,035; credit Sales $1,020; credit Cash Over and Short $15.

D. Debit
Cash $1,020; debit Cash Over and Short for $15; credit Sales $1,035.

E. Debit
Cash Over and Short $15; credit Cash $15.

101. A key
factor in a voucher system includes all of the following except:

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 is
applied to purchases of merchandise inventory and all other expenses.

E. It is not
necessary if the supplier provides both receiving report and invoice with the
merchandise shipped.

102. The entry
to establish a petty cash fund includes:

A. A debit
to Cash and a credit to Petty Cash.

B. A debit
to Cash and a credit to Cash Over and Short.

C. A debit
to Petty Cash and a credit to Cash.

D. A debit
to Petty Cash and a credit to Accounts Receivable.

E. A debit
to Cash and a credit to Petty Cash Over and Short.

103. Ferguson
Co. decides to establish a petty cash fund with a beginning balance of $200.
The company decides that any purchase under $25 can be processed through petty
cash instead of the voucher system. The journal entry to record establishing
the account is:

A. Debit
Cash $200 and credit Petty Cash $200.

B. Debit
Cash $200 and credit Cash Over and Short $200.

C. Debit
Petty Cash $200 and credit Cash $200.

D. Debit
Petty Cash $200; credit Cash $175; and credit Cash Over and Short $25.

E. Debit
Cash $200 and credit Petty Cash Over and Short $200.

104. The entry
to record reimbursement of the petty cash fund for postage expense should
include:

A. A debit
to Postage Expense.

B. A debit
to Petty Cash.

C. A debit
to Cash.

D. A debit
to Cash Short and Over.

E. A debit
to Supplies.

105. Ferguson
Co. has a $200 petty cash fund. At the end of the first month the accumulated
receipts represent $43 for delivery expenses, $127 for merchandise inventory,
and $12 for miscellaneous expenses. The fund has a balance of $18. The journal
entry to record the reimbursement of the account includes a:

A. Debit to
Petty Cash for $200.

B. Debit to
Cash Over and Short for $18.

C. Credit to
Cash for $182.

D. Credit to
Inventory for $127.

E. Credit to
Cash Over and Short for $18.

106. When a
petty cash fund is in use:

A. Expenses
paid with petty cash are recorded when the fund is replenished.

B. Petty
Cash is debited when funds are replenished.

C. Petty
Cash is credited when funds are replenished.

D. Expenses
are not recorded.

E. Cash is
debited when funds are replenished.

107. When
reimbursing the petty cash fund:

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.

108. Assume that
the custodian of a $450 petty cash fund has $64.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $379.50.

B. A credit
to Cash Over and Short for $3.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $385.50.

E. A debit
to Cash for $385.50.

109. Assume that
the custodian of a $450 petty cash fund has $62.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $377.50.

B. A debit
to Cash Over and Short for $5.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $382.50.

E. A debit
to Cash for $387.50.

110. A company
wants to decrease its $200 petty cash fund to $175. The entry to reduce the
fund is:

A. Debit
Cash Over and Short for $25; credit Petty Cash $25.

B. Debit to
Cash $25; credit Petty Cash $25.

C. Debit
Miscellaneous Expenses $25; credit Cash $25.

D. Debit
Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.

E. Debit
Petty Cash $25; credit Cash $25.

61. Which of
the following is not one of the policies and procedures that make up an
internal control system?

A. Protect
assets.

B. Ensure
reliable accounting.

C. Guarantee
a return to investors.

D. Urge
adherence to company policies.

E. Promote
efficient operations.

62. Managers
place a high priority on internal control systems because the systems assist
managers in all of the following except:

A. Promoting
efficient operations.

B. Protecting
assets.

C. Urging
adherence to company policies.

D. Ensuring
reliable accounting.

E. Assuring
that no loss will occur.

63. The
principles of internal control include:

A. Separate
recordkeeping from custody of assets.

B. Maintain
minimal records.

C. Use only
computerized systems.

D. Bond all
employees.

E. Require
automated sales systems.

64. Principles
of internal control include all of the following except:

A. Apply
technological controls.

B. Maintaining
security by having one person track and record assets.

C. Perform
regular and independent reviews.

D. Separate
recordkeeping from custody of assets.

E. Divide
responsibilities for related transactions.

65. A properly
designed internal control system:

A. Lowers
the company’s risk of loss.

B. Insures
profitable operations.

C. Eliminates
the need for an audit.

D. Requires
the use of non-computerized systems.

E. Is not
necessary if the company uses a computerized system.

66. A
company’s internal control system:

A. Eliminates
the company’s risk of loss.

B. Monitors
company and employee performance.

C. Eliminates
human error.

D. Eliminates
the need for audits.

E. Eliminates
the need for managers’ certification of controls.

67. Two clerks
sharing the same cash register is a violation of which internal control
principle?

A. Establish
responsibilities.

B. Maintain
adequate records.

C. Insure
assets.

D. Bond key
employees.

E. Apply
technological controls.

68. Which
internal control principle prescribes the use of pre-numbered printed checks?

A. Technological
controls.

B. Maintain
adequate records.

C. Perform
regular and independent reviews.

D. Establish
responsibilities.

E. Divide
responsibility for related transactions.

69. The impact
of technology on internal controls includes:

A. Reduced
processing errors.

B. Elimination
of the need for regular audits.

C. Elimination
of the need to bond employees.

D. Elimination
of separation of duties.

E. Elimination
of fraud.

70. Internal
control policies and procedures have limitations not including:

A. Human
error.

B. Human
fraud.

C. Cost-benefit
principle.

D. Collusion.

E. Establishing
responsibilities.

71. Internal
control systems are:

A. Developed
by the Securities and Exchange Commission for public companies.

B. Developed
by the Small Business Administration for non-public companies.

C. Developed
by the Internal Revenue Service for all U.S. companies.

D. Required
by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock
is traded on an exchange.

E. Required
only if a company plans to engage in interstate commerce.

72. Cash, not
including cash equivalents, includes:

A. Postage
stamps.

B. Customer
checks, cashier checks, and money orders.

C. IOUs.

D. Two-year
certificates of deposit.

E. Money
market funds.

73. Cash
equivalents:

A. Are short-term,
highly liquid investment assets.

B. Include
6-month certificates of deposit.

C. Include
checking accounts.

D. Are
recorded in petty cash.

E. Include
money orders.

74. Cash
equivalents:

A. Include
savings accounts.

B. Include
checking accounts.

C. Are
readily converted to a known cash amount.

D. Include
time deposits.

E. Have no
immediate value.

75. Cash
equivalents meet all of the following criteria except:

A. Are
readily convertible to a known cash amount.

B. Include
short-term investments purchased within 3 months of their maturity dates.

C. Have a
market value that is not sensitive to interest rate changes.

D. Include
short-term U.S. treasury bills.

E. Are more
liquid than cash.

76. The
following information is available for Birch Company at December 31:

Money market fund balance $2,790
Certificate of deposit maturing June 30 of next year $10,000
Postdated checks from customers $1,475
Cash in bank account $21,430
NSF checks from customers returned by bank $650
Cash in petty cash fund$200
Inventory of postage stamps $24
U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year $5,000

Based on this
information, Birch Company should report Cash and Cash Equivalents on December
31 of:

A. $29,420

B. $41,345

C. $31,345

D. $39,420

E. $38,770

77. The
following information is available for Fenton Manufacturing Company at June 30:

Cash in bank account $11,455
Inventory of postage stamps $74
Money market fund balance $10,400
Petty cash balance $350
NSF checks from customers returned by bank $867
Postdated checks received from customers $791
Money orders $290
A nine-month certificate of deposit maturing on December 31
of current year $6,000

Based on this
information, Fenton Manufacturing Company should report Cash and Cash
Equivalents on June 30 of:

A. $28,495

B. $29,286

C. $23,286

D. $12,095

E. $22,495

78. The
following information is available for Montrose Company at December 31:

Cash in bank account $8,540
Petty cash 250
Money market fund balance $10,400
Checks from customers $1,350
NSF checks from customers returned by bank $805
Treasury bill maturing in 60 days $10,000
Money orders $290
A nine-month certificate of deposit maturing on March 31 of
next year $6,000

Based on this
information, the amounts considered Cash and Cash Equivalents, respectively on
December 31 are:

A. Cash
$10,430; Cash equivalents $20,400

B. Cash
$8,540; Cash equivalents $22,290

C. Cash
$8,790; Cash equivalents $26,400

D. Cash
$19,190; Cash equivalents $16,000

E. Cash
$11,235; Cash equivalents $26,400

79. Basic bank
services do not include:

A. Bank
accounts.

B. Bank deposits.

C. Checking.

D. Electronic
funds transfer.

E. Petty
cash management.

80. The three
parties involved with a check are:

A. The
writer, the cashier, and the bank.

B. The
maker, the payee, and the bank.

C. The
maker, the manager, and the payee.

D. The
bookkeeper, the payee, and the bank.

E. The
signer, the cashier, and the company.

81. A
remittance advice is a(n):

A. Explanation
for a payment by check.

B. Bank
statement.

C. Internal
voucher.

D. Electronic
funds transfer.

E. Cancelled
check.

82. A bank
statement provided by the bank includes:

A. A list of
outstanding checks.

B. A list of
petty cash amounts.

C. The
beginning and the ending balance of the depositor’s account.

D. A listing
of deposits in transit.

E. A
reconciliation to the depositor cash account.

83. A bank
does not issue a debit memorandum to notify the depositor of which of the
following?

A. All
withdrawals through an ATM.

B. A fee
assessed to the depositor’s account.

C. An
uncollectible check.

D. Periodic
payments arranged in advance, by a depositor.

E. A deposit
to their account.

84. Preparing
a bank reconciliation on a monthly basis is an example of:

A. Establishing
responsibility.

B. Separation
of duties.

C. Protecting
assets by proving the accuracy of cash records.

D. A
technological control.

E. Poor
internal control.

85. The number
of days’ sales uncollected:

A. Is used
to evaluate the liquidity of receivables.

B. Is
calculated by dividing accounts receivable by sales.

C. Measures
a company’s ability to pay its bills on time.

D. Measures
a company’s debt to income.

E. Is
calculated by dividing sales by accounts receivable.

86. The days’
sales uncollected ratio is used to:

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 current amount of accounts
receivable is received in cash.

E. Measure
the amount of cash sales during a period.

87. The number
of days’ sales uncollected is calculated by:

A. Dividing
accounts receivable by net sales.

B. Dividing
accounts receivable by net sales and multiplying by 365.

C. Dividing
net sales by accounts receivable.

D. Dividing
net sales by accounts receivable and multiplying by 365.

E. Multiplying
net sales by accounts receivable and dividing by 365.

88. All of the
following are true of the number of days’ sales uncollected ratio except:

A. Is most
effective in evaluating the cash sales of a company.

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. Measures
how much time is likely to pass before the current amount of accounts
receivable is received in cash.

89. A company
had net sales of $21,500 and ending accounts receivable of $2,700 for the
current period. Its days’ sales uncollected equals:

A. 8.0 days.

B. 58.9
days.

C. 45.8
days.

D. 7.4 days.

E. 45.2
days.

90. Freeman
Co. had net sales of $4.2 million and ending accounts receivable of $0.8
million. Its days’ sales uncollected equals:

A. 5.3 days.

B. 69.5
days.

C. 19.2
days.

D. 11.5
days.

E. 292 days.

91. The
following information is taken from Reagan Company’s December 31 balance sheet:

Cash and cash equivalents $8,419
Accounts receivable 70,422
Merchandise inventories 60,362
Prepaid expenses 4,100
Accounts payable $14,950
Notes payable 86,638
Other current liabilities 9,500

If net credit sales
for the current year were $612,000, the firm’s days’ sales uncollected for the
year is:

A. 60 days

B. 85 days

C. 42 days

D. 154 days

E. 70 days

92. An income
statement account that is used to record cash overages and cash shortages
arising from petty cash transactions or from errors in making change is
titled:

A. Cash
Lost.

B. Bank
Reconciliation.

C. Petty
Cash.

D. Cash Over
and Short.

E. Cash
Receivable.

93. A set of
procedures and approvals for verifying, approving and recording obligations for
eventual cash disbursement, and for issuing checks for payment only of
verified, approved, and recorded obligations is referred to as a(n):

A. Internal
cash system.

B. Petty
cash system.

C. Cash
disbursement system.

D. Voucher
system.

E. Cash
control system.

94. Internal
control procedures for cash receipts do not require that:

A. Custody
over cash is kept separate from its recordkeeping.

B. All
collections for sales are be received immediately upon making the sales.

C. Clerks
having access to cash in a cash register should not have access to the register
tape or file.

D. An
employee with no access to cash receipts should compare the total cash recorded
by the register with the record of cash receipts reported by the cashier.

E. Cash
sales should be recorded on a cash register at the time of each sale.

95. The Cash
Over and Short account:

A. Is used
when the cash account reports a credit balance.

B. Is used
to record the income effects of errors in making change and/or processing petty
cash transactions.

C. Is not
necessary in a computerized accounting system.

D. Can never
have a debit balance.

E. Can never
have a credit balance.

96. The
voucher system of control:

A. Is a set
of procedures and approvals designed to control cash receipts and the
acceptance of obligations.

B. Establishes
procedures for verifying, approving, and recording obligations for eventual
cash disbursement.

C. Establishes
procedures for receiving checks for the sale of verified, approved, and
recorded activities.

D. Applies
only when multiple purchases are made from the same supplier.

E. Is
required in large companies but not beneficial for small to mid-sized
companies.

97. A voucher
is an internal document or file:

A. Prepared
after an invoice is received.

B. Used as a
substitute for an invoice if the supplier fails to send one.

C. Used to
accumulate information needed to control cash disbursements and to ensure that
transactions are properly recorded.

D. Takes the
place of a bank check.

E. Prepared
before the company orders goods to make sure that all goods are being ordered
from an approved vendor list.

98. Which of
the following procedures would weaken control over cash receipts that arrive
through the mail?

A. After the
mail is opened, a list (in triplicate) of the money received is prepared with a
record of the sender’s name, the amount, and an explanation of why the money is
sent.

B. The bank
reconciliation is prepared by a person who does not handle cash or record cash
receipts.

C. For
safety, only one person should open the mail, and that person should
immediately deposit the cash received in the bank.

D. The
cashier deposits the money in the bank and the recordkeeper records the amounts
received in the accounting records.

E. The employees
handling the cash receipts are bonded.

99. At the end
of the day, the cash register’s record shows $1,050, but the count of cash in
the cash register is $1,055. The correct entry to record the cash sales
is:

A. Debit
Cash $1,055; Credit Sales $1,055.

B. Debit
Cash $1,055; credit Cash Over and Short $5; credit Sales $1,050.

C. Debit
Cash $1,050; credit Sales $1050.

D. Debit
Cash $1,050; debit Cash Over and Short $5; credit Sales $1,055.

E. Debit
Cash Over and Short $5; credit Sales $5.

100. At the end
of the day, the cash register tape shows $1,020 in cash sales but the count of
cash in the register is $1,035. The proper entry to account for this excess is:

A. Debit
Cash $1,020; credit Sales $1,020.

B. Debit
Cash $1,035; credit Sales $1,035.

C. Debit
Cash $1,035; credit Sales $1,020; credit Cash Over and Short $15.

D. Debit
Cash $1,020; debit Cash Over and Short for $15; credit Sales $1,035.

E. Debit
Cash Over and Short $15; credit Cash $15.

101. A key
factor in a voucher system includes all of the following except:

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 is
applied to purchases of merchandise inventory and all other expenses.

E. It is not
necessary if the supplier provides both receiving report and invoice with the
merchandise shipped.

102. The entry
to establish a petty cash fund includes:

A. A debit
to Cash and a credit to Petty Cash.

B. A debit
to Cash and a credit to Cash Over and Short.

C. A debit
to Petty Cash and a credit to Cash.

D. A debit
to Petty Cash and a credit to Accounts Receivable.

E. A debit
to Cash and a credit to Petty Cash Over and Short.

103. Ferguson
Co. decides to establish a petty cash fund with a beginning balance of $200.
The company decides that any purchase under $25 can be processed through petty
cash instead of the voucher system. The journal entry to record establishing
the account is:

A. Debit
Cash $200 and credit Petty Cash $200.

B. Debit
Cash $200 and credit Cash Over and Short $200.

C. Debit
Petty Cash $200 and credit Cash $200.

D. Debit
Petty Cash $200; credit Cash $175; and credit Cash Over and Short $25.

E. Debit
Cash $200 and credit Petty Cash Over and Short $200.

104. The entry
to record reimbursement of the petty cash fund for postage expense should
include:

A. A debit
to Postage Expense.

B. A debit
to Petty Cash.

C. A debit
to Cash.

D. A debit
to Cash Short and Over.

E. A debit
to Supplies.

105. Ferguson
Co. has a $200 petty cash fund. At the end of the first month the accumulated
receipts represent $43 for delivery expenses, $127 for merchandise inventory,
and $12 for miscellaneous expenses. The fund has a balance of $18. The journal
entry to record the reimbursement of the account includes a:

A. Debit to
Petty Cash for $200.

B. Debit to
Cash Over and Short for $18.

C. Credit to
Cash for $182.

D. Credit to
Inventory for $127.

E. Credit to
Cash Over and Short for $18.

106. When a
petty cash fund is in use:

A. Expenses
paid with petty cash are recorded when the fund is replenished.

B. Petty
Cash is debited when funds are replenished.

C. Petty
Cash is credited when funds are replenished.

D. Expenses
are not recorded.

E. Cash is
debited when funds are replenished.

107. When
reimbursing the petty cash fund:

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.

108. Assume that
the custodian of a $450 petty cash fund has $64.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $379.50.

B. A credit
to Cash Over and Short for $3.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $385.50.

E. A debit
to Cash for $385.50.

109. Assume that
the custodian of a $450 petty cash fund has $62.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:

A. A debit
to Cash for $377.50.

B. A debit
to Cash Over and Short for $5.00.

C. A debit
to Petty Cash for $382.50.

D. A credit
to Cash for $382.50.

E. A debit
to Cash for $387.50.

110. A company
wants to decrease its $200 petty cash fund to $175. The entry to reduce the
fund is:

A. Debit
Cash Over and Short for $25; credit Petty Cash $25.

B. Debit to
Cash $25; credit Petty Cash $25.

C. Debit
Miscellaneous Expenses $25; credit Cash $25.

D. Debit
Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.

E. Debit
Petty Cash $25; credit Cash $25.

61. Which of
the following is not one of the policies and procedures that make up an
internal control system?



A. Protect
assets.


B. Ensure
reliable accounting.


C. Guarantee
a return to investors.


D. Urge
adherence to company policies.


E. Promote
efficient operations.


62. Managers
place a high priority on internal control systems because the systems assist
managers in all of the following except:



A. Promoting
efficient operations.


B. Protecting
assets.


C. Urging
adherence to company policies.


D. Ensuring
reliable accounting.


E. Assuring
that no loss will occur.


63. The
principles of internal control include:


A. Separate
recordkeeping from custody of assets.


B. Maintain
minimal records.


C. Use only
computerized systems.


D. Bond all
employees.


E. Require
automated sales systems.


64. Principles
of internal control include all of the following except:


A. Apply
technological controls.


B. Maintaining
security by having one person track and record assets.


C. Perform
regular and independent reviews.


D. Separate
recordkeeping from custody of assets.


E. Divide
responsibilities for related transactions.


65. A properly
designed internal control system:


A. Lowers
the company’s risk of loss.


B. Insures
profitable operations.


C. Eliminates
the need for an audit.


D. Requires
the use of non-computerized systems.


E. Is not
necessary if the company uses a computerized system.


66. A
company’s internal control system:


A. Eliminates
the company’s risk of loss.


B. Monitors
company and employee performance.


C. Eliminates
human error.


D. Eliminates
the need for audits.


E. Eliminates
the need for managers’ certification of controls.


67. Two clerks
sharing the same cash register is a violation of which internal control
principle?



A. Establish
responsibilities.


B. Maintain
adequate records.


C. Insure
assets.


D. Bond key
employees.


E. Apply
technological controls.


68. Which
internal control principle prescribes the use of pre-numbered printed checks?


A. Technological
controls.


B. Maintain
adequate records.


C. Perform
regular and independent reviews.


D. Establish
responsibilities.


E. Divide
responsibility for related transactions.


69. The impact
of technology on internal controls includes:


A. Reduced
processing errors.


B. Elimination
of the need for regular audits.


C. Elimination
of the need to bond employees.


D. Elimination
of separation of duties.


E. Elimination
of fraud.


70. Internal
control policies and procedures have limitations not including:


A. Human
error.


B. Human
fraud.


C. Cost-benefit
principle.


D. Collusion.

E. Establishing
responsibilities.


71. Internal
control systems are:


A. Developed
by the Securities and Exchange Commission for public companies.


B. Developed
by the Small Business Administration for non-public companies.


C. Developed
by the Internal Revenue Service for all U.S. companies.


D. Required
by Sarbanes-Oxley (SOX) to be documented and certified if the company’s stock
is traded on an exchange.



E. Required
only if a company plans to engage in interstate commerce.


72. Cash, not
including cash equivalents, includes:


A. Postage
stamps.


B. Customer
checks, cashier checks, and money orders.


C. IOUs.

D. Two-year
certificates of deposit.


E. Money
market funds.


73. Cash
equivalents:


A. Are short-term,
highly liquid investment assets.


B. Include
6-month certificates of deposit.


C. Include
checking accounts.


D. Are
recorded in petty cash.


E. Include
money orders.


74. Cash
equivalents:


A. Include
savings accounts.


B. Include
checking accounts.


C. Are
readily converted to a known cash amount.


D. Include
time deposits.


E. Have no
immediate value.


75. Cash
equivalents meet all of the following criteria except:


A. Are
readily convertible to a known cash amount.


B. Include
short-term investments purchased within 3 months of their maturity dates.


C. Have a
market value that is not sensitive to interest rate changes.


D. Include
short-term U.S. treasury bills.


E. Are more
liquid than cash.


76. The
following information is available for Birch Company at December 31:


Money market fund balance $2,790
Certificate of deposit maturing June 30 of next year $10,000
Postdated checks from customers $1,475
Cash in bank account $21,430
NSF checks from customers returned by bank $650
Cash in petty cash fund$200
Inventory of postage stamps $24
U.S. Treasury bill purchased on December 15 and maturing on
February 28 of following year $5,000









Based on this
information, Birch Company should report Cash and Cash Equivalents on December
31 of:



A. $29,420

B. $41,345

C. $31,345

D. $39,420

E. $38,770

77. The
following information is available for Fenton Manufacturing Company at June 30:


Cash in bank account $11,455
Inventory of postage stamps $74
Money market fund balance $10,400
Petty cash balance $350
NSF checks from customers returned by bank $867
Postdated checks received from customers $791
Money orders $290
A nine-month certificate of deposit maturing on December 31
of current year $6,000









Based on this
information, Fenton Manufacturing Company should report Cash and Cash
Equivalents on June 30 of:



A. $28,495

B. $29,286

C. $23,286

D. $12,095

E. $22,495

78. The
following information is available for Montrose Company at December 31:


Cash in bank account $8,540
Petty cash 250
Money market fund balance $10,400
Checks from customers $1,350
NSF checks from customers returned by bank $805
Treasury bill maturing in 60 days $10,000
Money orders $290
A nine-month certificate of deposit maturing on March 31 of
next year $6,000









Based on this
information, the amounts considered Cash and Cash Equivalents, respectively on
December 31 are:



A. Cash
$10,430; Cash equivalents $20,400


B. Cash
$8,540; Cash equivalents $22,290


C. Cash
$8,790; Cash equivalents $26,400


D. Cash
$19,190; Cash equivalents $16,000


E. Cash
$11,235; Cash equivalents $26,400


79. Basic bank
services do not include:


A. Bank
accounts.


B. Bank deposits.

C. Checking.

D. Electronic
funds transfer.


E. Petty
cash management.


80. The three
parties involved with a check are:


A. The
writer, the cashier, and the bank.


B. The
maker, the payee, and the bank.


C. The
maker, the manager, and the payee.


D. The
bookkeeper, the payee, and the bank.


E. The
signer, the cashier, and the company.


81. A
remittance advice is a(n):


A. Explanation
for a payment by check.


B. Bank
statement.


C. Internal
voucher.


D. Electronic
funds transfer.


E. Cancelled
check.


82. A bank
statement provided by the bank includes:


A. A list of
outstanding checks.


B. A list of
petty cash amounts.


C. The
beginning and the ending balance of the depositor’s account.


D. A listing
of deposits in transit.


E. A
reconciliation to the depositor cash account.


83. A bank
does not issue a debit memorandum to notify the depositor of which of the
following?



A. All
withdrawals through an ATM.


B. A fee
assessed to the depositor’s account.


C. An
uncollectible check.


D. Periodic
payments arranged in advance, by a depositor.


E. A deposit
to their account.


84. Preparing
a bank reconciliation on a monthly basis is an example of:


A. Establishing
responsibility.


B. Separation
of duties.


C. Protecting
assets by proving the accuracy of cash records.


D. A
technological control.


E. Poor
internal control.


85. The number
of days’ sales uncollected:


A. Is used
to evaluate the liquidity of receivables.


B. Is
calculated by dividing accounts receivable by sales.


C. Measures
a company’s ability to pay its bills on time.


D. Measures
a company’s debt to income.


E. Is
calculated by dividing sales by accounts receivable.


86. The days’
sales uncollected ratio is used to:


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 current amount of accounts
receivable is received in cash.



E. Measure
the amount of cash sales during a period.


87. The number
of days’ sales uncollected is calculated by:


A. Dividing
accounts receivable by net sales.


B. Dividing
accounts receivable by net sales and multiplying by 365.


C. Dividing
net sales by accounts receivable.


D. Dividing
net sales by accounts receivable and multiplying by 365.


E. Multiplying
net sales by accounts receivable and dividing by 365.


88. All of the
following are true of the number of days’ sales uncollected ratio except:


A. Is most
effective in evaluating the cash sales of a company.


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. Measures
how much time is likely to pass before the current amount of accounts
receivable is received in cash.



89. A company
had net sales of $21,500 and ending accounts receivable of $2,700 for the
current period. Its days’ sales uncollected equals:



A. 8.0 days.

B. 58.9
days.


C. 45.8
days.


D. 7.4 days.

E. 45.2
days.


90. Freeman
Co. had net sales of $4.2 million and ending accounts receivable of $0.8
million. Its days’ sales uncollected equals:



A. 5.3 days.

B. 69.5
days.


C. 19.2
days.


D. 11.5
days.


E. 292 days.

91. The
following information is taken from Reagan Company’s December 31 balance sheet:


Cash and cash equivalents $8,419
Accounts receivable 70,422
Merchandise inventories 60,362
Prepaid expenses 4,100
Accounts payable $14,950
Notes payable 86,638
Other current liabilities 9,500







If net credit sales
for the current year were $612,000, the firm’s days’ sales uncollected for the
year is:



A. 60 days

B. 85 days

C. 42 days

D. 154 days

E. 70 days

92. An income
statement account that is used to record cash overages and cash shortages
arising from petty cash transactions or from errors in making change is
titled:




A. Cash
Lost.


B. Bank
Reconciliation.


C. Petty
Cash.


D. Cash Over
and Short.


E. Cash
Receivable.


93. A set of
procedures and approvals for verifying, approving and recording obligations for
eventual cash disbursement, and for issuing checks for payment only of
verified, approved, and recorded obligations is referred to as a(n):




A. Internal
cash system.


B. Petty
cash system.


C. Cash
disbursement system.


D. Voucher
system.


E. Cash
control system.


94. Internal
control procedures for cash receipts do not require that:


A. Custody
over cash is kept separate from its recordkeeping.


B. All
collections for sales are be received immediately upon making the sales.


C. Clerks
having access to cash in a cash register should not have access to the register
tape or file.



D. An
employee with no access to cash receipts should compare the total cash recorded
by the register with the record of cash receipts reported by the cashier.



E. Cash
sales should be recorded on a cash register at the time of each sale.


95. The Cash
Over and Short account:


A. Is used
when the cash account reports a credit balance.


B. Is used
to record the income effects of errors in making change and/or processing petty
cash transactions.



C. Is not
necessary in a computerized accounting system.


D. Can never
have a debit balance.


E. Can never
have a credit balance.


96. The
voucher system of control:


A. Is a set
of procedures and approvals designed to control cash receipts and the
acceptance of obligations.



B. Establishes
procedures for verifying, approving, and recording obligations for eventual
cash disbursement.



C. Establishes
procedures for receiving checks for the sale of verified, approved, and
recorded activities.



D. Applies
only when multiple purchases are made from the same supplier.


E. Is
required in large companies but not beneficial for small to mid-sized
companies.



97. A voucher
is an internal document or file:


A. Prepared
after an invoice is received.


B. Used as a
substitute for an invoice if the supplier fails to send one.


C. Used to
accumulate information needed to control cash disbursements and to ensure that
transactions are properly recorded.



D. Takes the
place of a bank check.


E. Prepared
before the company orders goods to make sure that all goods are being ordered
from an approved vendor list.



98. Which of
the following procedures would weaken control over cash receipts that arrive
through the mail?



A. After the
mail is opened, a list (in triplicate) of the money received is prepared with a
record of the sender’s name, the amount, and an explanation of why the money is
sent.




B. The bank
reconciliation is prepared by a person who does not handle cash or record cash
receipts.



C. For
safety, only one person should open the mail, and that person should
immediately deposit the cash received in the bank.



D. The
cashier deposits the money in the bank and the recordkeeper records the amounts
received in the accounting records.



E. The employees
handling the cash receipts are bonded.


99. At the end
of the day, the cash register’s record shows $1,050, but the count of cash in
the cash register is $1,055. The correct entry to record the cash sales
is:




A. Debit
Cash $1,055; Credit Sales $1,055.


B. Debit
Cash $1,055; credit Cash Over and Short $5; credit Sales $1,050.


C. Debit
Cash $1,050; credit Sales $1050.


D. Debit
Cash $1,050; debit Cash Over and Short $5; credit Sales $1,055.


E. Debit
Cash Over and Short $5; credit Sales $5.


100. At the end
of the day, the cash register tape shows $1,020 in cash sales but the count of
cash in the register is $1,035. The proper entry to account for this excess is:



A. Debit
Cash $1,020; credit Sales $1,020.


B. Debit
Cash $1,035; credit Sales $1,035.


C. Debit
Cash $1,035; credit Sales $1,020; credit Cash Over and Short $15.


D. Debit
Cash $1,020; debit Cash Over and Short for $15; credit Sales $1,035.


E. Debit
Cash Over and Short $15; credit Cash $15.


101. A key
factor in a voucher system includes all of the following except:


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 is
applied to purchases of merchandise inventory and all other expenses.


E. It is not
necessary if the supplier provides both receiving report and invoice with the
merchandise shipped.



102. The entry
to establish a petty cash fund includes:


A. A debit
to Cash and a credit to Petty Cash.


B. A debit
to Cash and a credit to Cash Over and Short.


C. A debit
to Petty Cash and a credit to Cash.


D. A debit
to Petty Cash and a credit to Accounts Receivable.


E. A debit
to Cash and a credit to Petty Cash Over and Short.


103. Ferguson
Co. decides to establish a petty cash fund with a beginning balance of $200.
The company decides that any purchase under $25 can be processed through petty
cash instead of the voucher system. The journal entry to record establishing
the account is:





A. Debit
Cash $200 and credit Petty Cash $200.


B. Debit
Cash $200 and credit Cash Over and Short $200.


C. Debit
Petty Cash $200 and credit Cash $200.


D. Debit
Petty Cash $200; credit Cash $175; and credit Cash Over and Short $25.


E. Debit
Cash $200 and credit Petty Cash Over and Short $200.


104. The entry
to record reimbursement of the petty cash fund for postage expense should
include:



A. A debit
to Postage Expense.


B. A debit
to Petty Cash.


C. A debit
to Cash.


D. A debit
to Cash Short and Over.


E. A debit
to Supplies.


105. Ferguson
Co. has a $200 petty cash fund. At the end of the first month the accumulated
receipts represent $43 for delivery expenses, $127 for merchandise inventory,
and $12 for miscellaneous expenses. The fund has a balance of $18. The journal
entry to record the reimbursement of the account includes a:





A. Debit to
Petty Cash for $200.


B. Debit to
Cash Over and Short for $18.


C. Credit to
Cash for $182.


D. Credit to
Inventory for $127.


E. Credit to
Cash Over and Short for $18.


106. When a
petty cash fund is in use:


A. Expenses
paid with petty cash are recorded when the fund is replenished.


B. Petty
Cash is debited when funds are replenished.


C. Petty
Cash is credited when funds are replenished.


D. Expenses
are not recorded.


E. Cash is
debited when funds are replenished.


107. When
reimbursing the petty cash fund:


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.


108. Assume that
the custodian of a $450 petty cash fund has $64.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:




A. A debit
to Cash for $379.50.


B. A credit
to Cash Over and Short for $3.00.


C. A debit
to Petty Cash for $382.50.


D. A credit
to Cash for $385.50.


E. A debit
to Cash for $385.50.


109. Assume that
the custodian of a $450 petty cash fund has $62.50 in coins and currency plus
$382.50 in receipts at the end of the month. The entry to replenish the petty
cash fund will include:




A. A debit
to Cash for $377.50.


B. A debit
to Cash Over and Short for $5.00.


C. A debit
to Petty Cash for $382.50.


D. A credit
to Cash for $382.50.


E. A debit
to Cash for $387.50.


110. A company
wants to decrease its $200 petty cash fund to $175. The entry to reduce the
fund is:



A. Debit
Cash Over and Short for $25; credit Petty Cash $25.


B. Debit to
Cash $25; credit Petty Cash $25.


C. Debit
Miscellaneous Expenses $25; credit Cash $25.


D. Debit
Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.


E. Debit
Petty Cash $25; credit Cash $25.


testimonials icon
The instructions is listed on the paper that I posted and it’s just a journal for this ryeading wich probalby should not take too long t...
testimonials icon
Order Grade A+ Academic Papers Instantly!...
testimonials icon
Respond in 100 words with in-text citation and reference ...
testimonials icon
Project ManagerMalagoda Gamage ChinthakaDeshapriya, Jayanthi watte, Midigama,Ahangama. 10th December 2012. ManagerHuman Resources,Hotel Galadari,64,L...
testimonials icon
PHL 215 Week 4 Philosophy Matrix...
testimonials icon
Apa style, <7% similarity as usual. Answer all questions to get all credit. Trace the history of cannabis use in medicine fo...
testimonials icon
Discuss in as much detail as possible sources of fire research...
testimonials icon
French cooking? How Julia Child invented modern life Whitetail started Julia Child made America mad for food and changed notions...
testimonials icon
In 1998, Corning announced it was selling its consumer division, which made Pyrex, Revere metal cookware, and Corelle l...
testimonials icon
Then develop a summary statement concerning antecedents, cooperative behavior, and consequences.3. Explain the importance of conducting assessments...
testimonials icon
  Essay topic: Reflecting on the concepts you have studied in the course, research a company and discuss the legal and ethical issues surroun...

Other samples, services and questions:

Calculate Price

When you use PaperHelp, you save one valuable — TIME

You can spend it for more important things than paper writing.

Approx. price
$65
Order a paper. Study better. Sleep tight. Calculate Price!
Created with Sketch.
Calculate Price
Approx. price
$65