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The bank often informs the company of bank service charges by including a credit memo with the monthly bank statement.

A) True
B) False

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Thompson Company developed the following reconciling information in preparing its October bank reconciliation: Thompson Company developed the following reconciling information in preparing its October bank reconciliation:   Using the above information, determine the cash balance per books (before adjustments)  for the Thompson Company. A)  $11,050 B)  $19,450 C)  $15,950 D)  $11,150 Using the above information, determine the cash balance per books (before adjustments) for the Thompson Company.


A) $11,050
B) $19,450
C) $15,950
D) $11,150

E) B) and C)
F) None of the above

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Peaches, Inc. reported the following data in it's December 31, 2011 annual report: Peaches, Inc. reported the following data in it's December 31, 2011 annual report:    Required: (1) What is the company's  cash burn  per month? (2) What is the company's ratio of cash to monthly cash expenses? Required: (1) What is the company's "cash burn" per month? (2) What is the company's ratio of cash to monthly cash expenses?

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(1) $240,000/12=$20,...

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In preparing a bank reconciliation, the amount of a canceled check omitted from the journal is added to the balance per company's records.

A) True
B) False

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A voucher system is an example of an internal control procedure over cash payments.

A) True
B) False

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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


A) accounting controls
B) cash controls
C) preventive controls
D) detective controls

E) None of the above
F) All of the above

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C

During 2010, Tempo Inc has monthly cash expenses of $115,000. On December 31, 2010, their cash balance is $1,437,500. The ratio of cash to monthly cash expenses is


A) 8.0
B) 12.5
C) 87.5
D) 11.5

E) A) and B)
F) B) and D)

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A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is required in the company's accounts?


A) debit Accounts Payable; credit Cash
B) debit Cash; credit Accounts Receivable
C) debit Cash; credit Accounts Payable
D) debit Accounts Receivable; credit Cash

E) None of the above
F) C) and D)

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In management's internal control report that is now required of all public companies, which of the following does not have a direct effect on a company's internal control system?


A) internal auditors
B) independent accountants
C) Board of Director's audit committee
D) Board of Trustees

E) B) and C)
F) All of the above

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D

EFT


A) means Efficient Funds Transfer
B) can process certain cash transactions at less cost than by using the mail
C) makes it easier to document purchase and sale transactions
D) means Effective Funds Transfer

E) B) and C)
F) A) and C)

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For each of the following, explain whether the issue would require you to prepare a journal entry for your company, assuming any original entry is correct. If an entry is required, please include it as part of your answer. (1) The bank recorded your deposit as $91 rather than the actual amount of $191. (2) Two outstanding checks amounted to $450. (3) Company check number 538 for postage was recorded incorrectly by the company bookkeeper as $50 instead of $59. (4) The bank paid a check for $500 after the company had issued a stop payment and voided the check. (5) An EFT deposit was made by one of the company's customers, Atlas Design, for merchandise received. The sale had previously been recorded when shipped and was equal to the payment amount of $125.

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(1) If you recorded the deposit correctl...

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Credit memos from the bank


A) decrease a bank customer's account
B) are used to show a bank service charge
C) show that a company has deposited a customer's NSF check
D) show the bank has collected a note receivable for the customer

E) A) and B)
F) B) and D)

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D

The sum of the money on hand and petty cash receipts in a petty cash fund will always be equal to the balance in the Petty Cash account.

A) True
B) False

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List the objectives of internal control and give an example of how each is implemented.

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Internal control provides reas...

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A bank statement


A) is a credit reference letter written by the company's bank.
B) lets a company know the financial position of the bank as of a certain date.
C) is a bill from the bank for services rendered.
D) shows the activity that increased or decreased the company's account balance.

E) A) and B)
F) C) and D)

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In preparing a bank reconciliation, the amount of deposits in transit is deducted from the balance per bank statement.

A) True
B) False

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The cash account for Santiago Co. on May 31, 2014 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: The cash account for Santiago Co. on May 31, 2014 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:    Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries. Santiago Co. Bank Reconciliation May 31, 2014    Journal   Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries. Santiago Co. Bank Reconciliation May 31, 2014 The cash account for Santiago Co. on May 31, 2014 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:    Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries. Santiago Co. Bank Reconciliation May 31, 2014    Journal   Journal The cash account for Santiago Co. on May 31, 2014 indicated a balance of $20,915. The March bank statement indicated an ending balance of $25,645. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:    Prepare a bank reconciliation as of May 31, 2014. Journalize the necessary entries. Santiago Co. Bank Reconciliation May 31, 2014    Journal

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Santiago Co.
Bank Re...

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The bank statement for Gatlin Co. indicates a balance of $7,735.00 on June 30, 2010. After the journals for June had been posted, the cash account had a balance of $4,098.00. Prepare a bank reconciliation on the basis of the following reconciling items: The bank statement for Gatlin Co. indicates a balance of $7,735.00 on June 30, 2010. After the journals for June had been posted, the cash account had a balance of $4,098.00. Prepare a bank reconciliation on the basis of the following reconciling items:

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Journalize the entries to record the following: Sept 1 Established a petty cash fund of $350 Sept 30 The amount of cash in the petty cash fund is now $130. The fund is replenished based on the following receipts: office supplies, $116; postage $100. Record any discrepancy in the cash short and over account. Journal Journalize the entries to record the following: Sept 1 Established a petty cash fund of $350 Sept 30 The amount of cash in the petty cash fund is now $130. The fund is replenished based on the following receipts: office supplies, $116; postage $100. Record any discrepancy in the cash short and over account. Journal

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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


A) deposited checks returned for insufficient funds
B) a promissory note left for collection
C) a service charge
D) notification that a customer's check for $375 was recorded by the company as $735 on the deposit ticket

E) A) and B)
F) A) and C)

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