Cash equivalents 1. will be converted to cash within two years 2. are illegal in some states 3. will be converted to cash within 120 days 4. will be converted to cash within 90 days Save Answer 2. (Points: 5) A 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? 1. debit Cash; credit Accounts Receivable 2. debit Accounts Receivable; credit Cash 3. debit Accounts Payable; credit Cash 4. debit Cash; credit Accounts Payable Save Answer 3. (Points: 5) A voucher 1. is normally prepared in the Accounting Department 2. is received from customers to explain the purpose of a payment 3. system is used to control cash receipts 4. system is an internal control procedure to verify that the assets in the ledger are the ones the company owns Save Answer 4. (Points: 5) During a bank reconciliation process, 1. Outstanding checks and deposits in transit are subtracted from the bank statement balance. 2. Outstanding checks and deposits in transit are added to the bank statement balance. 3. Outstanding checks are added and deposits in transit are subtracted to the bank statement balance. 4. Outstanding checks are subtracted and deposits in transit are added to the bank statement balance. Save Answer 5. (Points: 5) Entries are made to the Petty Cash account when 1. establishing the fund. 2. recording shortages in the fund. 3. replenishing the petty cash fund. 4. making payments out of the fund. Save Answer 6. (Points: 5) The objectives of internal control are to 1. control the internal organization of the accounting department personnel and equipment 2. provide control over "internal-use only" reports and employee internal conduct 3. prevent fraud, and promote the social interest of the company 4. provide reasonable assurance that operations are managed to achieve goals, financial reports are accurate, and laws and regulations are complied with Save Answer 7. (Points: 5) A special form on which is recorded pertinent data about a liability and the particulars of its payment is called a(n) 1. voucher 2. remittance advice 3. invoice 4. debit memo Save Answer 8. (Points: 5) When a firm uses internal auditors, it is adhering to which one of the following internal control elements? 1. risk assessment 2. separating responsibilities for related operations 3. monitoring 4. proofs and security measures Save Answer 9. (Points: 5) Which one of the following below reflects a weak internal control system? 1. all employees are well supervised 2. a single employee is responsible for comparing a receiving report to an invoice 3. a single employee is responsible for collecting and recording of cash 4. all employees must take their vacations Save Answer 10. (Points: 5) A bank statement 1. lets a company know the financial position of the bank as of a certain date. 2. is a bill from the bank for services rendered. 3. is a credit reference letter written by the company's bank. 4. shows the activity that increased or decreased the company's account balance. Save Answer 11. (Points: 5) A 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 is 1. a service charge 2. notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket 3. a promissory note left for collection 4. deposited checks returned for insufficient funds Save Answer 12. (Points: 5) Which of the following would be subtracted from the balance per books on a bank reconciliation? 1. Deposits in transit 2. Outstanding checks 3. Notes collected by the bank 4. Service charges Save Answer 13. (Points: 5) An element of internal control is 1. journals 2. controlling accounts 3. risk assessment 4. subsidiary ledgers Save Answer 14. (Points: 5) A 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) 1. addition to the balance per the company's records 2. addition to the balance per the bank statement 3. deduction from the balance per the bank statement 4. deduction from the balance per the company's records Save Answer 15. (Points: 5) Receipts from cash sales of $7,500 were recorded incorrectly in the cash receipts journal as $5,700. What entry is required in the company's accounts? 1. debit Sales; credit Cash 2. debit Cash; credit Accounts Receivable 3. debit Accounts Receivable; credit Cash 4. debit Cash; credit Sales Save Answer 16. (Points: 5) The cash account in the company's ledger is a(n) 1. liability with a credit balance 2. asset with a credit balance 3. liability with a debit balance 4. asset with a debit balance Save Answer 17. (Points: 5) Journal entries based on the bank reconciliation are required in the company's accounts for 1. book errors 2. deposits in transit 3. bank errors 4. outstanding checks Save Answer 18. (Points: 5) The amount of the outstanding checks is included on the bank reconciliation as a(n) 1. addition to the balance per company's records 2. addition to the balance per bank statement 3. deduction from the balance per company's records 4. deduction from the balance per bank statement Save Answer 19. (Points: 5) Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called 1. detective controls 2. cash controls 3. accounting controls 4. preventive controls Save Answer 20. (Points: 5) There are three parties to a check. The drawer is 1. is the one who signs the check ordering payment by the bank 2. a written document signed by the company 3. the party to whom payment is to be made 4. the bank on which the check is drawn