Question 1

Which of the following would NOT be recorded as a cash sale?

Accepted Answer

A)  Customer who pays with a check.
B)  Customer who pays with a debit card.
C)  Customer who pays with a credit card.
D)  A customers who buys on account.E) A) and B)
F) All of the above

Question 2

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided.
-____ Cash receipts received by the company but not yet recorded by the bank.

Accepted Answer

A)  Bank service fees
B)  Deposits outstanding
C)  Interest earned
D)  NSF checks
E)  Company errorF) Checks outstandingG) D) and E)
H) All of the above

Question 3

Investing activities include transactions designed to raise cash or finance the business.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is considered cash for financial reporting purposes?

Accepted Answer

A)  Accounts receivable.
B)  Investments with maturity dates greater than three months.
C)  Checks received from customers.
D)  Accounts payable.E) A) and C)
F) A) and D)

Question 5

Separation of duties refers to auditors not being allowed to perform both audit and nonaudit services for the same client.

Accepted Answer

A) True 
 B)False

Question 6

Allowing the employee who authorizes purchases to also prepare the check is an example of good internal control.

Accepted Answer

A) True 
 B)False

Question 7

The statement of cash flows reports a company's cash inflows and cash outflows related to (1)operating activities, (2)investing activities,and (3)financing activities.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following would NOT need to be accounted for in a bank reconciliation?

Accepted Answer

A)  Deposits outstanding recorded by the company but not the bank.
B)  Interest earned recorded by the bank but not the company.
C)  NSF checks recorded by the bank but not by the company.
D)  Checks written by the company and recorded by the bank.E) A) and D)
F) B) and D)

Question 9

Consider the following cash flow items: Pay amount owed to bank for previous borrowing.
Pay utility costs.
Purchase equipment to be used in operations.
Purchase office supplies.
Purchase one year of rent in advance.
Pay workers' salaries.
Pay for research and development costs.
Pay taxes to the IRS.
Sell common stock to investors.
How many of these cash flow items involve financing activities?

Accepted Answer

A)  Zero.
B)  One.
C)  Two.
D)  Three.E) B) and D)
F) A) and D)

Question 10

A check outstanding will cause the bank's cash balance to be higher than the company's cash balance.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would NOT represent good controls over cash receipts?

Accepted Answer

A)  Record all cash receipts as soon as possible.
B)  The employee that receives cash and checks should also deposit them in the bank.
C)  Open mail each day and make a list of checks received with the amount and payer's name.
D)  Verify cash receipts by comparing the bank deposit slip with the accounting records.E) C) and D)
F) A) and B)

Question 12

Investing activities include cash transactions involving revenue and expense events during the period.

Accepted Answer

A) True 
 B)False

Question 13

The final step in reconciling the bank's cash balance and the company's cash balance is to update the company's cash balance for the items used to reconcile the bank's cash balance.

Accepted Answer

A) True 
 B)False

Question 14

Cash may not include:

Accepted Answer

A)  Foreign currency.
B)  Money orders.
C)  Accounts receivable.
D)  Undeposited customer checks.E) A) and C)
F) All of the above

Exam 4: Cash and Internal Controls

Allowing the employee who authorizes purchases to also prepare the check is an example of good internal control.

Correct Answer
verified

The statement of cash flows reports a company's cash inflows and cash outflows related to (1)operating activities, (2)investing activities,and (3)financing activities.

Correct Answer
verified

A check outstanding will cause the bank's cash balance to be higher than the company's cash balance.

Correct Answer
verified

Which of the following would NOT represent good controls over cash receipts?

Correct Answer
verified

Cash may not include:

Correct Answer
verified

Which of the following would NOT need to be accounted for in a bank reconciliation?

Correct Answer
verified

The final step in reconciling the bank's cash balance and the company's cash balance is to update the company's cash balance for the items used to reconcile the bank's cash balance.

Correct Answer
verified

Which of the following would NOT be recorded as a cash sale?

Correct Answer
verified

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Cash receipts received by the company but not yet recorded by the bank.

Correct Answer
verified

Investing activities include cash transactions involving revenue and expense events during the period.

Correct Answer
verified

Investing activities include transactions designed to raise cash or finance the business.

Correct Answer
verified

Which of the following is considered cash for financial reporting purposes?

Correct Answer
verified

Separation of duties refers to auditors not being allowed to perform both audit and nonaudit services for the same client.

Correct Answer
verified

Correct Answer
verified

Exam 4: Cash and Internal Controls

Allowing the employee who authorizes purchases to also prepare the check is an example of good internal control.

Correct AnswerverifiedShow Answer

The statement of cash flows reports a company's cash inflows and cash outflows related to (1)operating activities, (2)investing activities,and (3)financing activities.

Correct AnswerverifiedShow Answer

A check outstanding will cause the bank's cash balance to be higher than the company's cash balance.

Correct AnswerverifiedShow Answer

Which of the following would NOT represent good controls over cash receipts?

Correct AnswerverifiedShow Answer

Cash may not include:

Correct AnswerverifiedShow Answer

Which of the following would NOT need to be accounted for in a bank reconciliation?

Correct AnswerverifiedShow Answer

The final step in reconciling the bank's cash balance and the company's cash balance is to update the company's cash balance for the items used to reconcile the bank's cash balance.

Correct AnswerverifiedShow Answer

Which of the following would NOT be recorded as a cash sale?

Correct AnswerverifiedShow Answer

Listed below are six terms followed by a list of phrases that describe or characterize the terms.Match each phrase with the best term by placing the letter designating the term in the space provided. -____ Cash receipts received by the company but not yet recorded by the bank.

Correct AnswerverifiedShow Answer

Investing activities include cash transactions involving revenue and expense events during the period.

Correct AnswerverifiedShow Answer

Investing activities include transactions designed to raise cash or finance the business.

Correct AnswerverifiedShow Answer

Which of the following is considered cash for financial reporting purposes?

Correct AnswerverifiedShow Answer

Separation of duties refers to auditors not being allowed to perform both audit and nonaudit services for the same client.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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