QUESTION 6 Principles of internal control include all of the following except Perform regular and independent reviews. Separate recordkeeping from custody of assets. Divide responsibilities for related transactions. Maintaining security by having one person track and record assets. Apply technological controls. QUESTION 7 Which of the following is not true regarding a bank (or third party credit card expense? Credit card expense is a fee the seller pays for services provided by the card company. Credit card expense may be dassified as a "discount" deducted from sales to get net sales. Credit card expense may be dassified as a selling expense. Credit card expense may be classified as an administrative expense. Credit card expense is not recorded by the seller. QUESTION 8 Havermill Co. establishes a $250 petty cash fund on September 1. on September 30, the fund is replenished. The accumulated receipts on that date represent $73 for Office Supplies, 5137 for merchandise inventory, and $22 for miscellaneous expenses. The fund has a balance of $18. On October 1, the accountant determines that the fund should be increased by $50. The journal entry to record the increase in the fund balance on October 1 is: Debit Petty Cash $300; credit Cash $300. Debit Petty Cash $50; credit Cash $50. Debit Miscellaneous Expense $50;credit Cash $50. Debit Cash $50; credit Petty Cash $50. Debit Petty Cash $50; credit Accounts Payable $50. QUESTION 9 If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation? Add $45 to the bank's balance. Add $45 to the book balance. Subtract $45 from the bank's balance. Subtract $45 from the bank's balance and add $45 to the book's balance. Subtract $45 from the book balance. QUESTION 10 Martin Company purchases a machine at the beginning of the year at a cost of $60,000. The machine is deprecated using the straight-line method. The machine's useful life is estimated to be 4 years with a $5,000 salvage value. The book value of the machine at the end of year 4 is: $55,000. $30,000. $5.000. $13,750. $0. QUESTION 11 On November 19. Nicholson Company receives a $15,000, 60-day, 8% note from a customer as payment on account. What adjusting entry should be made on the December 31 year-end? (Use 360 days a year.) Debit interest Receivable $140: credit Interest Revenue $140. Debit Notes Receivable $140. credit Interest Receivable $140. Debit Interest Revenue $200: credit interest Receivable $200. Debit Notes Receivable $140 credit interest Revenue $140. Debit interest Receivable $1,200: credit interest Revenue $1,200
