Question 1

In a bank reconciliation, a deposit in transit is:

Accepted Answer

A)   added to the bank balance in the general ledger
B)   added to the bank balance on the bank statement
C)   deducted from the bank balance in the general ledger
D)   deducted from the bank balance on the bank statementE) A) and D)
F) None of the above

Question 2

All of the following are controls over cash received in a store except:

Accepted Answer

A)   the customer should be able to see the amounts entered into the register
B)   the clerk must have access to the cash register tape
C)   it should be a requirement that a receipt be given to the customer
D)   the cash drawer should open only when the sales clerk enters an amount on the keysE) A) and B)
F) A) and C)

Question 3

Prepare the bank reconciliation and adjusting entries for Mac Moose Company for April 30 , 2014 using the following information:

Accepted Answer

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Question 4

Business risks are risks that companies will not achieve its objectives.

Accepted Answer

A) True 
 B)False

Question 5

Identify and briefly describe the five components of internal control

Accepted Answer

The components of internal control are: ...

Question 6

Cash budgets are published as a part of the external financial statements.

Accepted Answer

A) True 
 B)False

Question 7

If the expected ending cash balance is $5,000, estimated cash receipts are $125,000, and estimated cash payments are $131,000, then:

Accepted Answer

A)   the beginning cash balance is $11,000
B)   the beginning cash balance is $6,000
C)   the beginning cash balance is $5,000
D)   the beginning cash balance is $1,000E) A) and D)
F) C) and D)

Question 8

Differentiate between the role of an external and internal auditor.

Accepted Answer

Both types of auditors are intended to t...

Question 9

When preparing a bank reconciliation, which of the following items would be added to the book balance?

Accepted Answer

A)   EFT payments
B)   deposits in transit
C)   NSF cheques
D)   EFT cash receiptsE) A) and B)
F) A) and C)

Question 10

In a bank reconciliation, bank service charges are:

Accepted Answer

A)   added to the bank balance on the bank statement
B)   deducted from the bank balance on the bank statement
C)   added to the bank balance in the general ledger
D)   deducted from the bank balance in the general ledgerE) B) and C)
F) All of the above

Question 11

An audit represents the examination of an organization's financial statements excluding its accounting system and controls.

Accepted Answer

A) True 
 B)False

Question 12

Briefly describe how payment of expenses by cheque is an important internal control.

Accepted Answer

Payment of expenses by cheque is an impo...

Question 13

In a bank reconciliation, a book error:

Accepted Answer

A)   may be added or deducted from the bank balance in the general ledger
B)   may be added or deducted from the bank balance on the bank statement
C)   must be added to the bank balance in the general ledger
D)   must be deducted from the bank balance in the general ledgerE) B) and C)
F) C) and D)

Question 14

In a bank reconciliation, outstanding cheques are:

Accepted Answer

A)   added to the bank balance on the bank statement
B)   added to the bank balance in the general ledger
C)   deducted from the bank balance on the bank statement
D)   deducted from the bank balance in the general ledgerE) B) and C)
F) A) and B)

Question 15

The entry to establish the petty cash fund is:

Accepted Answer

A)   
B)   
C)   
D)   E) All of the above
F) A) and D)

Question 16

In a bank reconciliation, interest revenue is:

Accepted Answer

A)   added to the bank balance on the bank statement
B)   deducted from the bank balance on the bank statement
C)   deducted from the bank balance in the general ledger
D)   added to the bank balance in the general ledgerE) A) and D)
F) B) and D)

Question 17

E-commerce creates risks such as computer viruses and stolen credit card numbers.

Accepted Answer

A) True 
 B)False

Question 18

What is an example of an item recorded by the company but not yet recorded by the bank?

Accepted Answer

A)   an electronic funds transfer
B)   a deposit in transit
C)   a service charge
D)   an NSF chequeE) A) and C)
F) C) and D)

Question 19

If a bank statement included an NSF cheque for $450, the journal entry to record this reconciling item would include a:

Accepted Answer

A)   debit to Cash for $450
B)   credit to Cash for $450
C)   credit to Accounts Receivable for $450
D)   debit to Accounts Payable for $450E) A) and B)
F) B) and C)

Question 20

Who has the primary responsibility for establishing and maintaining a company's system of internal control?

Accepted Answer

A)   the company's top management
B)   the company's internal auditors
C)   the company's external auditors
D)   the company's shareholdersE) A) and B)
F) A) and D)

Exam 4: Internal Control and Cash

Prepare the bank reconciliation and adjusting entries for Mac Moose Company for April 30 , 2014 using the following information:

Correct Answerverified_TB4002_00_TB4002_00 _TB4002_00_TB4002_0...View AnswerShow Answer

In a bank reconciliation, interest revenue is:

Correct AnswerverifiedShow Answer

In a bank reconciliation, a book error:

Correct AnswerverifiedShow Answer

Who has the primary responsibility for establishing and maintaining a company's system of internal control?

Correct AnswerverifiedShow Answer

When preparing a bank reconciliation, which of the following items would be added to the book balance?

Correct AnswerverifiedShow Answer

All of the following are controls over cash received in a store except:

Correct AnswerverifiedShow Answer

In a bank reconciliation, outstanding cheques are:

Correct AnswerverifiedShow Answer

Identify and briefly describe the five components of internal control

Correct AnswerverifiedThe components of internal control are: ...View AnswerShow Answer

In a bank reconciliation, bank service charges are:

Correct AnswerverifiedShow Answer

If a bank statement included an NSF cheque for $450, the journal entry to record this reconciling item would include a:

Correct AnswerverifiedShow Answer

What is an example of an item recorded by the company but not yet recorded by the bank?

Correct AnswerverifiedShow Answer

If the expected ending cash balance is $5,000, estimated cash receipts are $125,000, and estimated cash payments are $131,000, then:

Correct AnswerverifiedShow Answer

In a bank reconciliation, a deposit in transit is:

Correct AnswerverifiedShow Answer

An audit represents the examination of an organization's financial statements excluding its accounting system and controls.

Correct AnswerverifiedShow Answer

E-commerce creates risks such as computer viruses and stolen credit card numbers.

Correct AnswerverifiedShow Answer

Briefly describe how payment of expenses by cheque is an important internal control.

Correct AnswerverifiedPayment of expenses by cheque is an impo...View AnswerShow Answer

Differentiate between the role of an external and internal auditor.

Correct AnswerverifiedBoth types of auditors are intended to t...View AnswerShow Answer

The entry to establish the petty cash fund is:

Correct AnswerverifiedShow Answer

Business risks are risks that companies will not achieve its objectives.

Correct AnswerverifiedShow Answer

Cash budgets are published as a part of the external financial statements.

Correct AnswerverifiedShow Answer

Correct Answer
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The components of internal control are: ...
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Payment of expenses by cheque is an impo...
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Correct Answer
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Both types of auditors are intended to t...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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