Accounting Expert Answers & Study Resources : Page 17

21) In the following situation, which internal control procedure needs strengthening? At Hofstra Services, the junior accountant collects cheques and cash from customers and records the transactions into the Journal. The controller approves the journal entries and bank reconciliations. The treasurer signs cheques and approves contracts. A) Competent, reliable and ethical personnel B).

26) Each cell in a spreadsheet is defined by: A) formulas and labels. B) a row number and a label. C) a row number and a column letter. D) a formula and a column number. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 27) Computerised accounting packages are organised.

51) A company uses the direct write-off method to account for bad debts. Bad debts expense will be estimated as a percentage of sales. 52) The direct write-off method is used primarily by large, publicly owned companies. 53) Archer Company and Zorro Company both have significant amounts of accounts receivable at any.

66) Which of the following is an alternative title for the cash payments journal? A) The payments register B) The cheque register C) Cash disbursements journal D) All of the above are alternative titles for the cash payments journal. 67) On 4 May, a retail firm pays a rent of $2200 for the month of.

106) A petty cash fund was established with a $360 balance. It currently has cash of $41 and petty cash tickets totalling $319. Which of the following would be included in the entry to replenish the fund? A) A credit to Cash for $319 B) A credit to Cash for $41 C) A.

86) As long as the same person deposits customer cheques and records the deposits into the ledger, there will be good internal control over cash receipts. 87) A 'cash short' situation exists where the cash register tape total is less than the cash on hand. 88) Daily cash shorts and cash overs.

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 11) A well-designed accounting system must be able to accommodate change. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 12) The three stages of data processing are: A) inputs, decision making and.

16) Which of the following describes the internal control procedure separation of duties? A) External auditors will monitor internal controls. B) Cashiers must not have access to accounting records. C) The information system is critical. D) Prenumber invoices and other documents. 17) Which of the following describes the internal control procedure documents and records? A) Separate.

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) Internal control is the organisational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policy, promote operational efficiency and ensure accurate and reliable accounting records. 7) It.

31) Which of the following describes collusion? A) When a company defrauds its suppliers by making false claims B) When bogus websites acquire passwords and account numbers fraudulently C) When two or more people cooperate together to defraud a company D) When one employee steals from a company 32) 'Access creep' occurs when: A) an employee.

91) The acid-test ratio is calculated as current assets divided by current liabilities. 92) Days' sales in receivables is the ratio of average net accounts receivable to one day's sales. 93) An acid-test ratio of at least 1.0 is generally considered safe. 94) The acid-test ratio is also known as the quick ratio. 95).

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) The two major types of receivables are accounts receivable and bills receivable. 7) The creditor is the entity that signs a bill. 8) Bills receivable are usually longer in term than accounts receivable. 9) A debtor is a.

31) Posting the entries in the sales journal to the accounts receivable subsidiary ledger should be done: A) at the end of each month. B) only at the end of the accounting period. C) on a daily basis. D) on a weekly basis. 32) The account that is credited for every transaction entered in the.

76) If the bank reconciliation includes interest revenue, a journal entry is required that debits Cash and credits Interest revenue. 77) In a bank reconciliation, a book error will be shown on the bank side of the reconciliation. 78) In a bank reconciliation, a deposit in transit will be shown on the.

56) The bank statement reveals an EFT received from a customer that has not yet been recorded in the ledger. How would this information be included on the bank reconciliation? A) An addition on the bank side B) A deduction on the book side C) A deduction on the bank side D) An addition.

81) Which of the following describes the key significance of the acid ratio? A) It reflects how much long-term debt a company has. B) It measures a company's ability to pay its current liabilities by using its current assets. C) It indicates how much cash could be realised by selling off all the.

51) Which of the following items does NOT cause a difference in the bank balance and the book balance on a bank reconciliation? A) Cancelled cheques B) Deposits in transit C) Dishonoured cheques D) Outstanding cheques 52) Which of the following would be included in a journal to record a dishonoured cheque? A) A debit to.

86) What is the acid-test ratio for a retailer who has the following balances? (Round to two decimal places.)   Cash $20,000 Short-term investments 41,000 Net current receivables 52,000 Inventory 95,000 Total current liabilities 279,000   A) 0.41 B) 0.75 C) 0.8 D) 0.6 87) A company has net credit sales of $1,200,000, beginning net accounts receivable of $260,000 and ending net accounts receivable of $203,000. What.

116) A company makes a legitimate, properly authorised payment to a supplier. The accountant changes the date of the transaction to shift it to a later time period. Because the transaction is legitimate, this action would not be considered unethical. 117) A company urgently needs to repair its fire alarm system,.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 11) Which of the following is a benefit of selling on credit? A) Some customers do not pay, creating an expense. B) Expenses are reduced by making sales to a wide range of customers. C) Revenues are increased by.

1) Which of the following is TRUE of internal control? A) Internal controls are only necessary for large businesses. B) A company's outside auditor is responsible for the company's internal control system. C) Internal control procedures tend to diminish the importance of operational efficiency. D) One of the major purposes of internal control is.

121) In a voucher system, the vouchers are prepared by: A) the outside supplier. B) the accounting department. C) the sales department. D) the purchasing department. 122) A purchase order is sent by the purchasing department to: A) the outside supplier. B) the receiving department. C) the sales department. D) the accounting department. TRUE/FALSE. Write 'T' if the statement is.

76) With a manual accounting system, adjusting and closing entries: A) are recorded in the cash payments journal. B) are recorded in the general journal. C) are not recorded when a business uses special journals. D) are recorded in the cash receipts journal. 77) The transaction that would not be recorded in the general journal.

11) Which of the following describes the control environment? A) Internal auditors monitor company controls to safeguard assets and external auditors monitor the controls to ensure that the accounting records are accurate. B) A company must identify its risks. C) The control environment is the 'tone at the top' of the business. D) The.

66) What is the maturity value of a 3-month, 12% bill for $50,000? A) $51,500 B) $56,000 C) $50,000 D) $52,000 67) A company issues a 100-day, 14% bill for $17,000. What is the principal amount of the bill? A) $16,339 B) $17,000 C) $17,661 D) $19,380 68) On 1 October 2016, Ealys Jewellers accepted a 4-month, 10% bill for.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 41) Which of the following entries would be used to account for bad debts using the direct write-off method? A) Accounts receivable is debited and Bad debts expense is credited. B) Bad debts expense is debited and Allowance.

36) A cash receipts journal could contain all of the following columns except: A) sales revenue. B) purchases. C) accounts receivable. D) cash. 37) The accounts receivable credit column of the cash receipts journal is: A) posted in summary only at the end of the month. B) posted in summary at the end of the month and.

71) On 1 October 2016, Android Ltd made a loan to one of its customers. The customer signed a 4-month bill for $130,000 at 13%. How much interest revenue did the company record in the year 2017 for this bill? A) $2817 B) $5633 C) $1408 D) $4225 72) On 1 October 2016, Android Ltd.

76) A six-month bill receivable for $6000 at 11%, dated 1 September 2017, has accrued interest revenue of ________ on 31 December 2017. A) $220 B) $660 C) $110 D) $330 TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 77) Interest revenue must be reported for a bill receivable.

21) Inputs into accounting systems are the reports used for decision making, including the financial statements. 22) Design of an accounting information system begins with a trial balance. 23) The chart of accounts lists all the accounts and their account numbers. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or.

16) In a computerised accounting system, processing performed continuously as the transactions occur is referred to as: A) online processing. B) module processing. C) quick processing. D) batch processing. 17) ERP systems are used by some large organisations. ERP stands for: A) Early Reporting Process. B) Expense and Revenue Program. C) Enterprise Resource Planning. D) Enterprise Record Package. 18) Which.

61) The purchase of office equipment on credit would be recorded in: A) the cash payments journal. B) either the cash payments journal or the purchases journal. C) the purchases journal. D) the cash receipts journal. 62) Which journals would have a column for GST? A) Purchases and sales B) All the special journals C) Cash receipts and.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 71) The accounts payable subsidiary ledger has postings from which set of journals? A) Purchases, cash receipts and sales B) Sales, cash payments and general C) Purchases, general and cash receipts D) Purchases, general and cash payments 72) The journal in.

66) The bookkeeper of Fire Steel Ltd recorded a $1564 cheque as $15,640 in payment of the current month's rent. Which of the following journal entries is needed to adjust for this error in the books of the company? A) Cash 14,076   Rent expense   14,076   B) Cash 14,076   Sales revenue   14,076   C) Booking error 1564   Cash   1564   D) Rent expense 15,640   Cash   15,640   67) The following information is needed to reconcile.

91) A company cheque for payment must be signed by: A) a person specifically authorised by the company. B) the external auditor. C) a bank employee. D) any employee of the company. 92) Which of the following should the purchasing agent NOT be able to do? A) Receive the goods B) Contact the supplier of the goods C).

1) Which of the following is included in the category other receivables? A) Investments B) Bills receivable C) Loans to employees D) Accounts receivable 2) A record that contains the details by customer or vendor of the individual account balances would be called a: A) journal. B) subsidiary ledger. C) control account. D) liability account. 3) A creditor is a.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 56) Target allows customers to use MasterCard. It reports Sales revenue of $24 000 for the week. MasterCard charges Target a 3% fee. The journal entry for this transaction would be: A) Sales revenue 24 000   Card fee expense 720   Cash   24 720   B) Cash 23.

71) On a bank reconciliation, deposits in transit are subtracted on the book side of the reconciliation. 72) If the bank reconciliation includes a bank service charge, a journal entry is required that debits Cash and credits Miscellaneous expense. 73) If the bank reconciliation includes a deposit in transit, a journal entry.

36) 'Two-factor authentication' involves logging into a computer system with a user ID and a password. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 37) Which of the following is the most basic internal control for cash? A) Keeping money in a bank account B) Counting cash.

111) A key to strong control over petty cash is to ensure that several persons serve as custodian at one time. 112) An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account, supported by the fund (cash plus petty cash.

26) Mandatory vacations and job rotation improve internal control. 27) Separation of duties limits fraud and promotes the accuracy of the account records. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 28) Which of the following is a security procedure designed for e-commerce? A) Secure inventory storage B).

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 61) Which of the following is the party borrowing funds on a bill? A) The acceptor of the bill B) The drawer of the bill C) The payee of the bill D) The principal of the bill 62) Which of the.

81) Which of the following is the last step in the daily control over cash receipts by mail? A) A mailroom employee sends all customer cheques to the treasurer, who has the cashier make the bank deposit. B) The controller compares the records of the day's control total from the mailroom, the.

61) The following information is available for Jack's Unlimited Company for the current month.   Book balance end of the month $7100 Outstanding cheques 700 Deposits in transit 4000 Service charges 95 Interest revenue 35   What is the adjusted book balance on the bank reconciliation? A) $10,270 B) $7040 C) $7740 D) $6970 62) A company received a bank statement showing a balance of $77,000. Reconciling items.

6) Hardware is the electronic equipment that includes: A) computers, monitors, printers and networks. B) monitors, printers, software and databases. C) monitors, printers, software and networks. D) computers, monitors and software. 7) Which of the following is a feature of an effective accounting information system? A) compatibility B) control C) flexibility D) all of the above 8) Keeping accurate records.

46) Zorro Company has significant amounts of accounts receivable and experiences bad debts from time to time. Zorro uses the direct write-off method. When Zorro Company writes off a bad debt, what is the effect of that single transaction? A) It will increase total assets of the company. B) It will reduce.

46) A cheque of $75 deposited by a company was returned from the bank as a dishonoured cheque. How would this information be included on the bank reconciliation? A) An addition on the bank side B) An addition on the book side C) A deduction on the book side D) A deduction on the.

TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 41) Cash is the most liquid of all company assets. 42) The remittance advice or copy of a cheque provides details of a transaction that may be recorded in the cash receipts journal. MULTIPLE CHOICE. Choose the one.

101) The use of electronic data interchange (EDI) bypasses the need for people and documents in cash payment procedures. MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 102) Which of the following would be included in the entry to record the replenishment of a petty.

96) Which of the following statements describes a receiving report? A) It is a statement from the supplier showing the goods purchased and the amount due. B) It is a document authorising a payment to a supplier. C) It is a report showing that the goods have been received in good condition, as.