Chapter 07 – Internal Control and Cash
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Page 11
28. 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
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
29. A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you
must add $90 to the bank statement balance.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
30. If an adjustment for an NSF check is made in a company’s bank reconciliation, then the company must have written a
bad check during the month.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 14
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
37. In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an
amount larger than the amount of the check is added to the balance per company’s records.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
38. A check outstanding for two consecutive months will appear only on the first month’s bank reconciliation.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
Copyright Cengage Learning. Powered by Cognero.
Page 15
39. After a bank reconciliation is completed, journal entries are prepared for items in the balance per company’s records as
well as items in the balance per bank statement.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
40. A business that requires all cash payments be made by check can not use a petty cash system.
a.
True
b.
False
ANSWER:
True
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-06 – LO: 07–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
41. In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts
Payable and a credit to Petty Cash.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-06 – LO: 07–06
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.06 – Recording Transactions
Chapter 07 – Internal Control and Cash
Copyright Cengage Learning. Powered by Cognero.
Page 18
a.
True
b.
False
ANSWER:
POINTS:
DIFFICULTY:
QUESTION TYPE:
HAS VARIABLES:
LEARNING OBJECTIVES:
ACCREDITING STANDARDS:
DATE CREATED:
DATE MODIFIED:
48. A compensating balance occurs when a bank may require a company to maintain a maximum cash balance.
a.
True
b.
False
ANSWER:
POINTS:
DIFFICULTY:
QUESTION TYPE:
HAS VARIABLES:
LEARNING OBJECTIVES:
ACCREDITING STANDARDS:
DATE CREATED:
DATE MODIFIED:
49. Cash equivalents include short-term investments that will be converted to cash within 120 days.
a.
True
b.
False
ANSWER:
False
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
True / False
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-07 – LO: 07–07
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.09 – Financial Statements
ACCT.ACBSP.APC.10 – Internal Control
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM