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BRIEF EXERCISES BE 110 Match each of the principles and phases in the development of an accounting system with the statement that best describes them. a.Cost effectivenessb.Flexibility c.Useful output _____1.Information must be understandable, relevant, reliable, timely, and accurate. _____2.Benefits of information must outweigh the cost of providing it. _____3.The system should accommodate a variety of users.
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MULTIPLE CHOICE QUESTIONS 39.Which one of the following is not an objective of a system of internal controls? a.Safeguard company assets b.Overstate liabilities in order to be conservative c.Enhance the accuracy and reliability of accounting records d.Reduce the risks of errors 40.Internal controls are concerned with a.only manual systems of accounting. b.the extent of government regulations. c.safeguarding assets. d.preparing income.
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Ex. 195 Bell Food Store developed the following information in recording its bank statement for the month of March. Balance per books March 31$  3,664 Balance per bank statement March 31$10,900 ——————————————————————————————————————————— (1)Checks written in March but still outstanding $7,000. (2)Checks written in February but still outstanding $3,100. (3)Deposits of March 30 and 31 not yet recorded.
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BRIEF EXERCISES BE 168 Match the principle of internal control to each of the following cases. a)Establishment of responsibility b)Segregation of duties c)Accountability for assets d)Documentation procedures e)Physical controls _____1.Cash is locked in a safe overnight. _____2.Employees who receive shipments of goods do not have access to the accounting records for merchandise. _____3.Shipping documents are prenumbered. _____4.The bookkeeper does not have.
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62.Correcting entries are journalized in a.a special journal. b.the general journal. c.the general ledger. d.a correcting journal. 63.Adjusting entries are recorded a.only on the worksheet. b.only in the general ledger. c.in the general journal. d.in the special journals. 64.All of the column totals in the cash receipts journal are posted to general ledger accounts except the a.Accounts Receivable column total. b.Cash column.
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59.Related purchasing activities include a.ordering, receiving, paying. b.ordering, selling, paying. c.ordering, shipping, billing. d.selling, shipping, paying. 60.Jared is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates a.documentation procedures are violated. b.independent internal verification is violated. c.segregation of duties is violated. d.establishment of responsibility is violated. 61.Physical controls.
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11.The responsibility for ordering, receiving, and paying for merchandise should be assigned to different individuals. 12.In order to prevent a transaction from being recorded more than once, a company should maintain only one book of original entry. 13.Firms use physical controls primarily to safeguard their assets. 14.A segregation of duties among employees eliminates.
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Ex. 186 The petty cash fund of $200 for George Company appeared as follows on December 31, 2016: Cash$59.40 Petty cash vouchers Freight in$27.60 Postage40.00 Balloons for a special occasion68.00 Instructions 1.Briefly describe when the petty cash fund should be replenished. Because there is cash on hand, is there a need to replenish the fund at year end.
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89.A petty cash fund should be replenished a.every day. b.at the end of every accounting period. c.once a year. d.as soon as an expense is paid from the fund. 90.A petty cash fund should not be used for a.postage due. b.loans to the petty cash custodian. c.taxi fares. d.customer lunches. 91.The size of the petty cash fund is dependent on a.the.
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Ex. 194 White Water Kayak Company's bank statement for the month of September showed a balance per bank of $6,900. The company's Cash account in the general ledger had a balance of $5,573 at September 30. Other information is as follows: (1)Cash receipts for September 30 recorded on the company's books were.
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Ex. 128 Gaston Company began business on October 1. The partial sales journal, as it appeared at the end of the month, follows: SALES JOURNALPage 1 ——————————————————————————————————————————— InvoicePost. DateAccount DebitedNumberRef.Amount ——————————————————————————————————————————— Oct.5Robin Pryor1001375 11Ted Haag1002335 16Robin Pryor1003718 19Betty Frye1004147 26Nancy Sloan10051,184 2,759 1.Open general ledger T-accounts for Accounts Receivable (No. 112) and Sales Revenue (No. 401) and an accounts receivable subsidiary T-account ledger.
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139.Smothers Company assembled the following information in completing its March bank reconciliation: balance per bank $7,640; outstanding checks $1,700; deposits in transit $2,600; NSF check $130; bank service charge $40; cash balance per books $8,800. As a result of this reconciliation, Smothers will a.reduce its cash account by $40. b.reduce its cash.
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149.Having different individuals receive cash, record cash receipts, and hold the cash is an example of a.establishment of responsibility. b.segregation of duties. c.documentation procedures. d.independent internal verification. 150.Storing cash in a company safe is an application of which internal control principle? a.Segregation of duties b.Documentation procedures c.Physical controls d.Establishment of responsibility 151.Using prenumbered checks and having an approved invoice for.
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Ex. 117 On December 1, the accounts receivable control account balance in the general ledger of the Picard Company was $9,500. The accounts receivable subsidiary ledger contained the following detailed customer balances: Selig $2,000, Jobs $2,400, Taylor $2,600, and Burton $2,500. The following information is available from the company's special journals.
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49.Internal auditors a.are hired by CPA firms to audit business firms. b.are employees of the IRS who evaluate the internal controls of companies filing tax returns. c.evaluate the system of internal controls for the companies that employ them. d.cannot evaluate the system of internal controls of the company that employs them because they are.
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52.In which journal would a cash purchase of inventory be recorded? a.Purchases journal b.General journal c.Cash payments journal d.None of these answer choices are correct. 53.The individual amounts in the sales journal are posted to the accounts receivable subsidiary ledger a.daily. b.weekly. c.monthly. d.yearly. 54.A sales journal is used to record a.only cash sales of merchandise. b.sales of all assets on credit.
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72.Cash from sales of merchandise will be recorded in the a.purchases journal. b.sales journal. c.cash receipts journal. d.general journal. 73.Postings from the purchases journal to the general ledger are made a.daily. b.monthly. c.weekly. d.yearly. 74.The individual amounts in the Accounts Payable column in the cash payments journal are posted to the subsidiary ledger a.daily. b.monthly. c.weekly. d.yearly. 75.Debit postings to the individual accounts in an.
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TRUE-FALSE STATEMENTS 1.Internal control is mainly concerned with the amount of authority a supervisor exercises over a subordinate. 2.A highly automated computerized system of accounting eliminates the need for internal control. 3.The safeguarding of assets is an objective of a company's system of internal control. 4.Management is responsible for establishing a system of internal.
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Ex. 118 Maldanado Company has a balance in its Accounts Payable control account of $10,500 on January 1, 2016. The subsidiary ledger contains three accounts: Smith Company, balance $3,000; White Company, balance $2,500 and Marino Company. During January, the following payable-related transactions occurred. PurchasesPaymentsReturns Smith Company$8,500$6,000$   -0- White Company5,2502,5001,500 Marino Company 6,1006,250-0- Instructions (a)What is the January.
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82.Proving the equality of the totals in the columns of multiple-column special journals is called a.posting to the subsidiary. b.debiting and crediting. c.footing and crossfooting. d.updating the master file. 83.If a company records merchandise it returns to suppliers in the general journal, then a.a posting must be made only to the accounts payable control account. b.a posting.
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Ex. 125 Circle the correct answer to each situation. (a)A sales journal will be used for: Credit SalesCash SalesSales Returns YesNoYesNoYesNo (b)A single-column purchases journal will be used for: Cash PurchasesPurchases on AccountPurchase Discounts YesNoYesNoYesNo (c)A multi-column purchases journal will be used for: Supplies PurchasedEquipment Purchased Cash Purchaseson Accounton Account YesNoYesNoYesNo (d)A cash payments journal will be used.
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Ex. 120 Devotchka Co. uses special journals and a general journal. The following transactions occurred during May 2016. May1Z. Devotchka invested $25,000 cash in the business. 2Sold merchandise to A. A. Bondy for $5,600 cash. The cost of the merchandise sold was $3,500. 3Purchased merchandise for $4,300 from Y. Vandyver using check no. 101. 14Paid.
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Ex. 129 Selected account balances for Billings Company at January 1, 2016, are presented below. Accounts Payable $18,000 Accounts Receivable   22,000 Cash   10,000 Inventory   13,500 Billings' sales journal for January shows a total of $143,000 in the selling price column, and its one-column purchases journal for January shows a total of $90,000. The column.
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159.Sarbanes Oxley applies to a.U.S companies but not international companies. b.international companies but not U.S. companies. c.U.S. and Canadian companies but not other international companies. d.companies listed on U.S. exchanges. 160.The fraud triangle applies to a.U.S companies but not international companies. b.international companies but not U.S. companies. c.U.S. and Canadian companies but not other international companies. d.U.S and international.
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Ex. 191 On April 30, the bank reconciliation of Baxter Company shows three outstanding checks: no. 354, $650, no. 355, $820, and no. 357, $615. The May bank statement and the May cash payments journal show the following. Bank Statement Cash Payments Journal                    Checks Paid                                  Checks Issued               Date Check No. Amount Date Check No. Amount 5/4 354 650 5/2 358 159 5/2 355 820 5/5 359 275 5/17 358 159 5/10 360 890 5/12 359 275 5/15 361 850 5/20 360 890 5/22 362 750 5/29 363 480 5/24 363 480 5/30 362 750 5/29 364 870 Ex. 191(Cont.) Instructions Using step.
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MATCHING 142.Match the items below by entering the appropriate code letter in the space provided. A.Cost effectivenessF.Subsidiary ledger B.Enterprise resource planning systemsG.Control account C.General ledger accounting systemH.Accounts receivable ledger D.Manual accounting systemI.Accounting information system E.Special journalsJ.Flexibility _____              1.A general ledger account which summarizes detailed information in a subsidiary ledger. _____              2.Benefits of information must exceed the cost of.
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BE 114 Indicate the special journal(s) in which the following column headings appear. 1.Cash  Cr._______________________ 2.Cost of Goods Sold  Dr._______________________ 3.Accounts Receivable  Dr._______________________ 4.Accounts Payable  Cr._______________________ 5.Inventory  Cr._______________________ 6.Sales Discounts  Dr._______________________ E 115 Indicate which of the following cash payments journal columns are posted only in total, only daily, or both in total and daily. 1.Other Accounts_______________________ 2.Accounts Payable_______________________ 3.Inventory_______________________ 4.Cash_______________________ .
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Ex. 122 Hawk Company uses a single-column purchases journal, a cash payments journal, and a general journal to record transactions with its suppliers and others. Record the following transactions in the appropriate journals. Transactions Oct.5Purchased merchandise on account for $19,000 from Harrelson Company. Terms:  2/10, n/30; FOB shipping point. Oct.6Paid $6,600 to Ken’s Insurance.
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92.An (x) below the "Other Accounts" column in a cash receipts journal indicates the a.total has been posted to the general ledger. b.total is not posted to the general ledger. c.column has been footed. d.column has been cross-footed. 93.Cross-footing a cash receipts journal means a.the equality of debits and credits in the journal have been proved. b.each.
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Ex. 131 Shown below is a page from cash payments journal. CASH PAYMENTS JOURNALPage 45 ——————————————————————————————————————————— OtherAccounts Ck.AccountPost.AccountsPayableInventoryCash DateNo.DebitedRef.Dr.Dr.Cr.Cr. ——————————————————————————————————————————— 20— Jan.4659B. Lager(a)5,000504,950 11660Prepaid Ins.(b)1,0001,000 13661Inventory(c)156656 14662Owner’s Drawings(d)2,4002,400 18663M. Young(e)1,4001,400 20664Inventory(f)450450 29665Equipment(g)3,800    3,800 8,3066,4005014,656 (h)(i)(j)(k) Using the cash payments journal above, identify each of the posting references indicated by a letter, as representing: (1)a posting to a general ledger account. (2)a posting to a subsidiary ledger account. Ex. 132 Shown below is a.
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Ex. 123 Manheim Company uses both special journals and a general journal. The company accountant made the following errors during July. 1.Incorrectly added the credit entries in a customer's account in the accounts receivable subsidiary ledger. The total was listed as $2,300; it should have been $2,570. 2.A remittance of $300 from Jim.
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EXERCISES Ex. 180 Match each of the following principles of internal control with the appropriate description below. A.Establishment of responsibilityD.Physical controls B.Segregation of dutiesE.Independent internal verification C.Documentation proceduresF.Human resource controls _____ 1.Involves the review, comparison, and reconciliation of data prepared by other employees. _____ 2.Provide evidence that transactions and events have occurred. _____ 3.Includes the.
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69.Which one of the following items would not be considered cash? a.Coins b.Money orders c.Currency d.All of these choices are considered cash. 70.Checks received through the mail should a.immediately be endorsed "For Deposit Only." b.be sent to the accounts receivable subsidiary ledger clerk for immediate posting to the customer's account. c.be cashed at the bank as soon as.
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109.If the month-end bank statement shows a balance of $58,000, outstanding checks are $15,000, a deposit of $7,000 was in transit at month end, and a check for $600 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is a.$49,400. b.$50,000. c.$50,600. d.$65,400. 110.In preparing.
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79.Allowing only the treasurer to sign checks is an example of a.documentation procedures. b.segregation of duties. c.other controls. d.establishment of responsibility. 80.Blank checks a.should be safeguarded. b.should be pre-signed. c.do not need to be safeguarded since they must be signed to be valid. d.should not be prenumbered. 81.An employee authorized to sign checks should not record a.owner cash contributions. b.mail receipts. c.cash disbursement.
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BE 174 Identify whether each of the following items would be (a) added to the book balance, (b) deducted from the book balance in a bank reconciliation, (c) added to the bank balance, or (d) deducted from the bank balance. 1.Deposits in transit 2.Bank service charge 3.Collection of note and interest by bank on.
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Ex. 121 Corona Company uses a sales journal, a cash receipts journal, and a general journal to record transactions with its customers. Record the following transactions in the appropriate journals. The cost of all merchandise sold was 65% of the sales price. July2Sold merchandise for $18,000 to M. Jordan on account. Credit.
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Ex. 127 Spencer Company uses four special journals, (cash receipts, cash payments, sales, and purchases journal) in addition to a general journal. On November 1, 2016, the control accounts in the general ledger had the following balances:  Cash $15,000, Accounts Receivable $180,000 and Accounts Payable $40,000. Selected information on the final.
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99.All of the following are parties to a check except the a.bank. b.Federal Reserve. c.maker. d.payee. 100.When opening a bank checking account, a signature card a.indicates to whom money is to be paid. b.indicates each person authorized to sign checks on the account. c.is attached to all pre-printed checks. d.is required only when dealing with an out-of-state bank. 101.Which one.
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COMPLETION STATEMENTS               134.The basic principles in the development of an accounting information system are (1)________________, (2)________________, and (3)_______________.               135.The accounts receivable ______________ provides detailed information about customer accounts which is summarized in one ______________ account in the general ledger.               136.If a certain type of transaction occurs with great frequency, it.
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119.Deposits in transit a.have been recorded on the company's books but not yet by the bank. b.have been recorded by the bank but not yet by the company. c.have not been recorded by the bank or the company. d.are checks from customers which have not yet been received by the company. 120.In preparing a bank.
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Ex. 133 On September 30, after all monthly postings had been completed, the Accounts Receivable control account in the general ledger had a debit balance of $245,000; the Accounts Payable control account had a credit balance of $109,000. Ex. 133(Cont.) The October transactions recorded in the special journals are presented below. Special JournalsOctober TransactionsSales.
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129.Hot Sox Company had checks outstanding totaling $18,200 on its May bank reconciliation. In June, Hot Sox Company issued checks totaling $78,900. The July bank statement shows that $71,400 in checks cleared the bank in July. A check from one of Hot Sox Company's customers in the amount of $2,200.
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S-A E  148(Communication) You are a supervisor in the accounting department of a large manufacturing company. Two weeks ago, you were anxious to leave for your vacation, and so you hurriedly recorded a whole stack of journal entries so that the others would not have as much to do while you.
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SHORT-ANSWER ESSAY QUESTIONS S-A E  143 Maggie Mize operates a small business and uses a manual system of accounting. Transactions are entered in the general journal and posted to accounts in the general ledger at the end of the month. Although the volume of transactions has increased significantly in the past year,.
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EXERCISES Ex. 116 After Picard Company had completed all posting for the month of December, the sum of the balances in the following accounts payable subsidiary ledger did not agree with the balance of the control account in the general ledger. NameRyker’s Address286 Buck Avenue ——————————————————————————————————————————— DateItemPost. Ref.DebitCreditBalance ——————————————————————————————————————————— Dec.2P252,4002,400 NameGeordie Company Address818 Western Avenue ——————————————————————————————————————————— DateItemPost. Ref.DebitCreditBalance ——————————————————————————————————————————— Dec.1Balance7,600 10CP237,600— 20P323,3003,300 29J158004,100 Ex. 116(Cont.) NameLaforge Company Address90210 Baker Boulevard ——————————————————————————————————————————— DateItemPost..
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