1. Which of the following would be deducted from the balance per books on a bank reconciliation?

a.

outstanding cheques

b.

service charges

c.

deposits in transit

d.

notes collected by the bank

Under the voucher system, when is every transaction recorded?

a.

at the time of paying

b.

at the time of ordering

c.

at the time of requisitioning

d.

at the time of incurring

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax return?

a.

Employee's Personal Income Tax Return

b.

Personal Tax Credit Return (Form TD1)

c.

Employer's Corporate Tax Return

d.

Statement of Remuneration Paid (Form T4

Which of the following columns would NOT be found in the payroll register?

a.

earnings

b.

cumulative earnings

c.

payment

d.

deductions

What is a minimum cash balance required by a bank called?

a.

an EFT

b.

a cash equivalent

c.

cash in bank

d.

a compensating balance

The Canada Labour Code establish regulations for employees regarding what?

a.

CPP contribution rate

b.

rate of pay

c.

hours worked

d.

income tax rate

What is the notification accompanying a cheque that indicates the specific invoice being paid?

a.

a remittance advice

b.

a credit memo

c.

a voucher

d.

a debit memo

A firm's internal control environment is NOT influenced by which one of the following?

a.

organizational structure

b.

personnel policies

c.

monitoring policies

d.

management's operating style

When a firm uses internal auditors, it is adhering to which one of the following internal control elements?

a.

risk assessment

b.

monitoring

c.

proofs and security measures

d.

separating responsibilities for related operations

The bank reconciliation is an important part of the system of internal controls.

True

False

The current portion of long-term debt is included in current liabilities. The amount includes both the principal and the interest payable within the coming year.

True

False

Expenditures from a petty cash fund are documented by a petty cash receipt.

True

False

HST paid on items that are not for resale is debited to which account?

a.

Sales Tax Expense

b.

HST Paid on Purchases

c.

HST Charged on Sales

d.

the same account as the related purchased item

Which of the following does NOT influence a business's control environment? Page 353

a.

management's philosophy and operating style

b.

proofs and security measurers

c.

personnel policies

d.

organizational structure

Which of the following is true regarding the bank reconciliation? page 369

a.

It is sent to the bank for verification.

b.

It is part of the internal control system.

c.

It should be prepared by an employee who records cash transactions.

d.

It is for information purposes only

Which of the following is an aid in internal control over payrolls that indicates employee attendance?

a.

a payroll register

b.

an employee's earnings record

c.

a voucher system

d.

a time card

What is the minimum vacation allowance % of pay?

a.

4%

b.

4.75%

c.

3.75%

d.

2%

Like other amounts deducted from employee earnings, federal and provincial income taxes are subject to a maximum amount per employee per year.

True

False

PST paid on items that are not for resale is debited to which account?

a.

PST Payable

b.

the same account as the related purchased item

c.

PST Paid on Purchases

d.

Sales Tax Expense

On the bank's accounting records, how are customers' accounts normally shown?

a.

as expenses

b.

as liabilities

c.

as assets

d.

as debit balances

An employee's earnings record is maintained for each employee and provides a record of deductions related to each employee's earnings.

True

False

What are current liabilities?

a.

liabilities due but not payable for more than one year

b.

liabilities due and payable within one year

c.

liabilities due but not receivable for more than one year

d.

liabilities due and receivable within one year

Amounts withheld from each employee for Canada Pension Plan and employment insurance vary by province.

True

False

Which of the following situations reflects a weakness in the internal control system?

a.

A single employee is responsible for collecting and recording of cash.

b.

All employees are well supervised.

c.

All employees must take their vacations.

d.

A single employee is responsible for comparing a receiving report to an invoice.

Quick assets of a company include assets such as cash, accounts receivable, and inventory.

True

False

Which of the following should NOT be considered cash by an accountant?

a.

money orders

b.

postage stamps

c.

travellers' cheques

d.

bank chequing accounts

In what type of account are federal and provincial income taxes withheld from an employee's gross pay recorded?

a.

as a liability

b.

as a payroll expense

c.

as an asset

d.

as a contra account

Which of the following is a necessary element of internal control?

a.

systems design

b.

systems analysis

c.

a database

d.

information and communication

Which of the following refers to the total earnings of an employee for a payroll period?

a.

net pay

b.

pay net of taxes

c.

gross pay

d.

take-home pay

Employment insurance contributions are paid by both the employee and the employer.

True

False

What is the debit balance in Cash Short and Over at the end of an accounting period reported as?

a.

a liability on the balance sheet

b.

income on the income statement

c.

an asset on the balance sheet

d.

an expense on the income statement

Most employers must pay a premium on payrolls for which of the following?

a.

sales tax

b.

medical insurance premiums

c.

union dues

d.

workers' compensation insurance premiums

Generally, all deductions made from an employee's gross pay are required by law.

True

False

Which of the following are included in the employer's portion of payroll expenses?

a.

CPP and EI premiums

b.

charitable donations

c.

federal and provincial taxes

d.

union dues

Which of the following is a special form on which is recorded pertinent data about a liability and the particulars of its payment?

a.

a remittance advice

b.

an invoice

c.

a voucher

d.

a debit memo

To reimburse the petty cash fund, which of the following accounts is debited?

a.

Cash

b.

various accounts for which the petty cash was disbursed

c.

Accounts Receivable

d.

Petty Cash

The petty cash fund eliminates the need for a bank chequing account.

True

False

Which of the following is an element of internal control?

a.

subsidiary ledgers

b.

journals

c.

controlling accounts

d.

risk assessment

GST charged on sales is shown in the Other Revenues section of the income statement.

True

False

Which of the following describes an EFT?

a.

It is an effective funds transfer.

b.

It is an efficient funds transfer.

c.

It makes it easier to document purchase and sale transactions.

d.

It can process certain cash transactions at less cost than by using the mail