Assignment Print View 5/6/2020 O Developed by the Internal Revenue Service for all U.S. companies Required by Sarbanes-Oxley (SOX) to be documented and certified if the company's stock is traded on an exchange la public company) Required only if a company plans to engage in Interstate commerce. References Multiple Choice Difficulty: 2 Medium Learning Objective: 06-C1 Define internal control and identify its purpose and principles 11. Award: 4.00 points The number of days' sales uncollected is used to: O Measure how many days of sales remain until the end of the year. Determine the number of days that have passed without collecting on accounts receivable. Identify the likelihood of collecting sales on account. O Estimate how much time is likely to pass before the current amount of accounts receivable is received in cash. Measure the amount of cash sales during a period. References Multiple Choice Difficulty 2 Medium Learning Objective: 06-A1 Compute the days sales uncollected ratio and use it to assess liquidity 12. Award 4.00 points Freeman Co had net sales of $42 million and ending accounts receivable of $0.8 million. Its days' sales uncollected equals 5.3 days. 69.5 days Assignment Print View 502020 19.2 days 11.5 days 292 days References Multiple Choice Difficulty: 2 Medium Learning Objective: 06-A1 Compute the days sales uncollected ratio and use it to assess liquidity. 13. Award: 4.00 points A set of procedures and approvals for verifying, approving and recording liabilities for eventual cash payment, and for issuing checks for payment only of verified, approved, and recorded liabilities is referred to as ant Internal cash system. Petty cash system. O Cash disbursement system, Voucher system. Cash control system O References Multiple Choice Difficulty: 2 Medium Learning Objective: 06-P1 Apply internal control to cash receipts and payments. 14. Award 4.00 points The Cash Over and Short account O O is used when the cash account reports a credit balance. is used to record the income effects of errors in making change and/or processing petty cash transactions 6/2020 Assignment Print View O is not necessary in a computerized accounting system. O can never have a debit balance. Can never have a credit balance. References Learning Objective: 06-P1 Apply Internal control to cash receipts and payments. Multiple Choice Difficulty: 2 Medium 15. Award: 400 points Spencer 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: Debit Cash $200 and credit Petty Cash $200 O Debit Cash $200 and credit Cash Over and Short $200. Debit Petty Cash $200 and credit Cash $200 Debit Petty Cash $200, credit Cash $175, and credit Cash Over and Short $25. Debit Cash $200 and credit Petty Cash Over and Short $200. References Multiple Choice Difficulty: 2 Medium Learning Objective: 06-P2 Explain and record petty cash fund transactions 16. Award: 4.00 points The entry to record reimbursement of the petty cash fund for postage expense should include: A debit to Postage Expense. A debit to Petty Cash A debit to Cash A debit to Cash Short and Over. O O
