Chapter 7

1.
	The bank reconciles its statement to the company's records. Student Response Value Correct Answer Feedback 1. True 0% 2. False Score: 0/1
2.
	Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Cash balance per bank, 10/31 $17,000 Note receivable collected by bank 4,800 Outstanding checks 6,500 Deposits-in-transit 3,000 Bank service charge 50 NSF check 2,300 Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company. Student Response Value Correct Answer Feedback 1. $11,150 2. $19,450 3. $15,950 4. $11,050 100% Score: 1/1
3.
	In preparing a bank reconciliation, the amount indicated by a credit memo for a note receivable collected by the bank is added to the balance per company's records. Student Response Value Correct Answer Feedback 1. False 2. True 100% Score: 1/1
4.
	A check drawn by a company in payment of a voucher for $635 was recorded in the journal as $365. This item would be included in the bank reconciliation as a(n) Student Response Value Correct Answer Feedback 1. deduction from the balance per the bank statement 2. deduction from the balance per the company's records 100% 3. addition to the balance per the bank statement 4. addition to the balance per the company's records Score: 1/1
5.
	The notification accompanying a check that indicates the specific invoice being paid is called a Student Response Value Correct Answer Feedback 1. voucher 2. debit memo 3. remittance advice 100% 4. credit memo Score: 1/1
6.
	A check drawn by a company in payment of a voucher for $635 was recorded in the journal as $365. What entry is required in the company's accounts? Student Response Value Correct Answer Feedback 1. debit Accounts Payable; credit Cash 100% 2. debit Accounts Receivable; credit Cash 3. debit Cash; credit Accounts Payable 4. debit Cash; credit Accounts Receivable Score: 1/1
7.
	When a firm uses internal auditors, it is adhering to which one of the following internal control elements? Student Response Value Correct Answer Feedback 1. separating responsibilities for related operations 2. risk assessment 3. monitoring 100% 4. proofs and security measures Score: 1/1
8.
	During a bank reconciliation process, Student Response Value Correct Answer Feedback 1. Outstanding checks are subtracted and deposits in transit are added to the bank statement balance. 100% 2. Outstanding checks are added and deposits in transit are subtracted to the bank statement balance. 3. Outstanding checks and deposits in transit are subtracted from the bank statement balance. 4. Outstanding checks and deposits in transit are added to the bank statement balance. Score: 1/1
9.
	An example of a preventive control is Student Response Value Correct Answer Feedback 1. bonding employees who handle cash 2. accepting payment in currency only 3. separation of the Purchasing Department and Accounting Department personnel 100% 4. the use of a bank account Score: 1/1
10.
	A check outstanding for two consecutive months will appear only on the first month's bank reconciliation. Student Response Value Correct Answer Feedback 1. False 2. True 0% Score: 0/1
11.
	Separating the responsibilities for purchasing, receiving, and paying for equipment is an example of the control procedure: separating operations, custody of assets, and accounting. Student Response Value Correct Answer Feedback 1. False 100% 2. True Score: 1/1
12.
	In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
13.
	There are three parties to a check. The drawer is Student Response Value Correct Answer Feedback 1. the party to whom payment is to be made 2. is the one who signs the check ordering payment by the bank 100% 3. the bank on which the check is drawn 4. a written document signed by the company Score: 1/1
14.
	Expenditures from a petty cash fund are documented by a petty cash receipt. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
15.
	If the balance in Cash Short and Over at the end of a period is a credit, it should be reported as an "other income" item on the income statement. Student Response Value Correct Answer Feedback 1. True 2. False 0% Score: 0/1
16.
	Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger account for each type of cash. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
17.
	Internal control does not consist of policies and procedures that Student Response Value Correct Answer Feedback 1. protect assets from misuse 2. aid management in directing operations toward achieving business goals 3. guarantee the company will not go bankrupt 100% 4. ensure that business information is accurate Score: 1/1
18.
	Which one of the following below reflects a weak internal control system? Student Response Value Correct Answer Feedback 1. all employees must take their vacations 2. a single employee is responsible for collecting and recording of cash 100% 3. a single employee is responsible for comparing a receiving report to an invoice 4. all employees are well supervised Score: 1/1
19.
	Which of the following is not an internal control activity for cash? Student Response Value Correct Answer Feedback 1. Surprise audits of cash on hand should be made occasionally. 2. The functions of record keeping and maintaining custody of cash should be combined. 100% 3. The number of persons who have access to cash should be limited. 4. All cash receipts should be recorded promptly. Score: 1/1
20.
	Money orders are considered cash. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1