54.
Proper internal control would require that a department manager inform the purchasing
department of its needs for additional merchandise by preparing and signing a purchase
requisition which lists the merchandise needed and requests that it be purchased.
55.
An invoice is an itemized statement of goods prepared by the customer listing the
customer’s name, items sold, sales prices, and terms of sale.
56.
Approved vouchers are recorded in a journal called the voucher register.
57.
A receiving report is a document used within a company to notify the appropriate persons
that ordered goods have been received and to describe the quantities and condition of the
goods.
58.
When a voucher system is used, an invoice approval is not needed as long as the purchase
is evidenced by an invoice and purchase order.
59.
In order to streamline the purchasing process, department managers should place orders
directly with suppliers.
60.
A purchase order is a document the purchasing department sends to the vendor to place
an order.
61.
Petty cash activities are part of an imprest system, which means the withdrawal amounts
are recorded in the accounting records as they are incurred.
62.
After the petty cash fund is established, the Petty Cash account is not debited or credited
again unless the amount of the fund is changed.
63.
If the petty cashier fails to get a receipt for a payment or overpays for the amount due, the
shortage in the account is debited to the Cash Over and Short account.
Multiple Choice Questions
64.
An internal control system consists of the policies and procedures used to accomplish all
of the following except:
65.
Managers place a high priority on internal control systems because the systems assist
managers in all of the following
except
:
66.
The principles of internal control include:
67.
Principles of internal control include all of the following except:
68.
A properly designed internal control system:
69.
A company’s internal control system:
70.
Two clerks sharing the same cash register is a violation of which internal control
principle?
71.
Which internal control principle prescribes the use of pre-numbered printed checks?
72.
The impact of technology on internal controls includes:
73.
The limitations of internal control policies and procedures
do
not
include:
74.
Internal control systems are:
75.
Cash, not including cash equivalents, includes:
76.
Cash equivalents:
77.
Cash equivalents:
78.
Cash equivalents meet all of the following criteria
except
:
6-33
79.
The following information is available for Birch Company at December 31:
Money market fund balance
$2,790
Certificate of deposit maturing June 30
of next year
$10,000
Cash in bank account
$21,430
NSF checks from customers returned by
bank
$650
Cash in petty cash fund
$200
Inventory of postage stamps
$24
U.S. Treasury bill purchased on
December 15 and maturing on February
28 of following year
$5,000
Based on this information, Birch Company should report Cash and Cash Equivalents on
December 31 of:
80.
The following information is available for Fenton Manufacturing Company at June 30:
Cash in bank account
$11,455
Inventory of postage stamps
$74
Money market fund balance
$10,400
6-34
Petty cash balance
$350
NSF checks from customers returned by
bank
$867
Postdated checks received from
customers
$791
Money orders
$290
A nine-month certificate of deposit
maturing
on December 31 of current year
$6,000
Based on this information, Fenton Manufacturing Company should report Cash and Cash
Equivalents on June 30 of:
81.
The following information is available for Montrose Company at December 31:
Cash in bank account
$8,540
Petty cash
250
Money market fund balance
$10,400
Checks from customers
$1,350
NSF checks from customers returned by
bank
$805
Treasury bill maturing in 60 days
$10,000
Money orders
$290
A nine-month certificate of deposit
maturing
on March 31 of next year
$6,000
Based on this information, the amounts considered Cash and Cash Equivalents,
respectively on December 31 are:
82.
Basic bank services
do
not
include:
83.
The three parties involved with a check are:
84.
A remittance advice is a(n):
85.
A bank statement provided by the bank includes:
86.
A bank does not issue a
debit
memorandum to notify the depositor of which of the
following?
87.
Preparing a bank reconciliation on a monthly basis is an example of:
88.
The number of days’ sales uncollected:
89.
The days’ sales uncollected ratio is used to:
90.
The number of days’ sales uncollected is calculated by:
91.
All of the following are true of the number of days’ sales uncollected ratio
except
: