Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
96)
The voucher system of control:
A)
Is a set of procedures and approvals designed to control cash receipts and the acceptance of
obligations.
B)
Applies only when multiple purchases are made from the same supplier.
C)
Establishes procedures for verifying, approving, and recording obligations for eventual cash
disbursement.
D)
Is required in large companies but not beneficial for small to mid-sized companies.
E)
Establishes procedures for receiving checks for the sale of verified, approved, and recorded
activities.
97)
A voucher is an internal document or file:
A)
Used to accumulate information needed to control cash disbursements and to ensure that
transactions are properly recorded.
B)
Used as a substitute for an invoice if the supplier fails to send one.
C)
Takes the place of a bank check.
D)
Prepared after an invoice is received.
E)
Prepared before the company orders goods to make sure that all goods are being ordered from
an approved vendor list.
98)
Which of the following procedures would weaken control over cash receipts that arrive through the
mail?
A)
The employees handling the cash receipts are bonded.
B)
For safety, only one person should open the mail, and that person should immediately deposit
the cash received in the bank.
C)
The cashier deposits the money in the bank and the recordkeeper records the amounts
received in the accounting records.
D)
After the mail is opened, a list (in triplicate) of the money received is prepared with a record
of the sender's name, the amount, and an explanation of why the money is sent.
E)
The bank reconciliation is prepared by a person who does not handle cash or record cash
receipts.
99)
At the end of the day, the cash register's record shows $2,050, but the count of cash in the cash
register is $2,058. The correct entry to record the cash sales is
A)
Debit Cash $2,058; credit Sales $2,058.
B)
Debit Cash $2,050; debit Cash Over and Short $8; credit Sales $2,058.
C)
Debit Cash Over and Short $8, credit Sales $8.
D)
Debit Cash $2,058; credit Cash Over and Short $8; credit Sales $2,050.
E)
Debit Cash $2,050; credit Sales $2,050.
100)
At the end of the day, the cash register tape shows $1,000 in cash sales but the count of cash in the
register is $1,010. The proper entry to account for this excess is:
A)
Debit Cash $1,010; credit Sales $1,000; credit Cash Over and Short $10.
B)
Debit Cash Over and Short $10; credit Cash $10.
C)
Debit Cash $1,010; credit Sales $1,010.
D)
Debit Cash $1,000; credit Sales $1,000.
E)
Debit Cash $1,000; debit Cash Over and Short for $10; credit Sales $1,010.
101)
A key factor in a voucher system includes all of the following except:
A)
It is applied to purchases of merchandise inventory and all other expenses.
B)
Procedures for purchasing, receiving, and paying for merchandise are divided among several
departments.
C)
It is not necessary if the supplier provides both receiving report and invoice with the
merchandise shipped.
D)
The system limits the individuals that can incur cash payment obligations for a company.
E)
Only approved departments and individuals are authorized to incur an obligation that will
result in the payment of cash.
102)
The entry to establish a petty cash fund includes:
A)
A debit to Petty Cash and a credit to Accounts Receivable.
B)
A debit to Petty Cash and a credit to Cash.
C)
A debit to Cash and a credit to Petty Cash.
D)
A debit to Cash and a credit to Petty Cash Over and Short.
E)
A debit to Cash and a credit to Cash Over and Short.
103)
Spencer Co. decides to establish a petty cash fund with a beginning balance of $200. The company
decides that any purchase under $25 can be processed through petty cash instead of the voucher
system. The journal entry to record establishing the account is:
A)
Debit Petty Cash $200 and credit Cash $200.
B)
Debit Cash $200 and credit Cash Over and Short $200.
C)
Debit Cash $200 and credit Petty Cash Over and Short $200.
D)
Debit Cash $200 and credit Petty Cash $200.
E)
Debit Petty Cash $200; credit Cash $175; and credit Cash Over and Short $25.
104)
The entry to record reimbursement of the petty cash fund for postage expense should include:
A)
A debit to Petty Cash.
B)
A debit to Cash Short and Over.
C)
A debit to Supplies.
D)
A debit to Postage Expense.
E)
A debit to Cash.
105)
Spencer Co. has a $200 petty cash fund. At the end of the first month the accumulated receipts
represent $43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous
expenses. The fund has a balance of $18. The journal entry to record the reimbursement of the
account includes a:
A)
Credit to Inventory for $127.
B)
Credit to Cash for $182.
C)
Debit to Cash Over and Short for $18.
D)
Debit to Petty Cash for $200.
E)
Credit to Cash Over and Short for $18.
106)
When a petty cash fund is in use:
A)
Cash is debited when funds are replenished.
B)
Expenses are not recorded.
C)
Petty Cash is credited when funds are replenished.
D)
Expenses paid with petty cash are recorded when the fund is replenished.
E)
Petty Cash is debited when funds are replenished.
107)
When reimbursing the petty cash fund:
A)
Appropriate expense accounts are debited.
B)
Cash is debited.
C)
Petty Cash is debited.
D)
Petty Cash is credited.
E)
No expenses are recorded.
108)
Assume that the custodian of a $450 petty cash fund has $65 in coins and currency plus $382 in
receipts at the end of the month. The entry to replenish the petty cash fund will include:
A)
A credit to Cash Over and Short for $3.
B)
A debit to Cash for $382.
C)
A debit to Petty Cash for $385.
D)
A credit to Cash for $385.
E)
A debit to Cash for $450.
109)
Assume that the custodian of a $450 petty cash fund has $62 in coins and currency plus $383 in
receipts at the end of the month. The entry to replenish the petty cash fund will include:
A)
A credit to Cash Over and Short for $5.
B)
A debit to Cash Over and Short for $5.
C)
A debit to Cash for $378.
D)
A debit to Petty Cash for $383.
E)
A credit to Cash for $383.
110)
A company wants to decrease its $200 petty cash fund to $175. The entry to reduce the fund is:
A)
Debit to Cash $25; credit Petty Cash $25.
B)
Debit Cash Over and Short for $25; credit Petty Cash $25.
C)
Debit Petty Cash $25; credit Cash $25.
D)
Debit Petty Cash for $175; debit Cash Over and Short $25; credit Cash $200.
E)
Debit Miscellaneous Expenses $25; credit Cash $25.
111)
A company had $43 missing from petty cash that was not accounted for by petty cash receipts. The
correct procedure is to:
A)
Debit Cash Over and Short for $43.
B)
Debit Petty Cash for $43.
C)
Credit Cash Over and Short for $43.
D)
Credit Petty Cash for $43.
E)
Credit Cash for $43.
112)
On a bank reconciliation, an unrecorded debit memorandum for printing checks is:
A)
Added to the book balance of cash.
B)
Deducted from the book balance of cash.
C)
Deducted from the bank balance of cash.
D)
Noted as a memorandum only.
E)
Added to the bank balance of cash.
113)
A debit memorandum on a bank statement indicates:
A)
A decrease in the bank's asset account.
B)
An increase in the bank's asset account.
C)
A decrease in the bank's liability account.
D)
An increase in the bank's expense account.
E)
An increase in the bank's liability account.
114)
A credit memorandum on a bank statement indicates:
A)
A decrease in the bank's asset account.
B)
A decrease in the bank's liability account.
C)
An increase in the bank's asset account.
D)
An increase in the bank's liability account.
E)
An increase in the bank's expense account.
115)
Childers Company, which uses a perpetual inventory system, has an established petty cash fund in
the amount of $400. The fund was last reimbursed on November 30. At the end of December, the
fund contained the following petty cash receipts:
December 4
Freight charge for merchandise purchased
$62
December 7
Delivery charge for shipping to customer
$46
December 12
Purchase of office supplies
$30
December 18
Donation to charitable o5r0ganization
$51
December 18
Donation to charitable organization
$51
If, in addition to these receipts, the petty cash fund contains $201 of cash, the journal entry to
reimburse the fund on December 31 will include:
A)
A credit to Cash of $199.
B)
A credit to Cash Over and Short of $10.
C)
A debit to Petty Cash of $189.
D)
A debit to Transportation-In of $62.
E)
A credit to Office Supplies of $30.
116)
An analysis that explains differences between the checking account balance according to the
depositor's records and the balance reported on the bank statement is a(n):
A)
Bank audit.
B)
Internal audit.
C)
Analysis of debits and credits.
D)
Bank reconciliation.
E)
Trial reconciliation.
117)
Outstanding checks refer to checks that have been:
A)
Held as blank checks.
B)
Written, recorded, sent to payees, and received and paid by the bank.
C)
Issued by the bank.
D)
Written and not yet recorded in the company books.
E)
Written, recorded on the company books, sent to the payee, but not yet paid by the bank.
118)
On a bank reconciliation, the amount of an unrecorded bank service charge should be:
A)
Deducted from the bank balance of cash.
B)
Added to the bank balance of cash.
C)
Added to the book balance of cash.
D)
Noted in memorandum form only.
E)
Deducted from the book balance of cash.
119)
If a check that was outstanding on last period's bank reconciliation was not among the cancelled
checks returned by the bank this period, in preparing this period's reconciliation, the amount of this
check should be:
A)
Added to the book balance of cash as an outstanding check.
B)
Deducted from the bank balance of cash as an outstanding check.
C)
Deducted from the book balance of cash as an outstanding check.
D)
Ignored in preparing the period's bank reconciliation as an outstanding check.
E)
Added to the bank balance of cash as an outstanding check.
120)
If a company made a bank deposit on September 30 that did not appear on the bank statement dated
September 30, in preparing the September 30 bank reconciliation, the company should:
A)
Deduct the deposit from the bank statement balance.
B)
Add the deposit to the bank statement balance.
C)
Send the bank a debit memorandum.
D)
Deduct the deposit from the September 30 book balance and add it to the October 1 book
balance.
E)
Add the deposit to the book balance of cash.
121)
If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's
books for $794, how should this error be treated on the bank reconciliation?
A)
Add $45 to the bank's balance.
B)
Add $45 to the book balance.
C)
Subtract $45 from the bank's balance.
D)
Subtract $45 from the bank's balance and add $45 to the book's balance.
E)
Subtract $45 from the book balance.
122)
If a check correctly written and paid by the bank for $272 is incorrectly recorded in the company's
books for $227, how should this error be treated on the bank reconciliation?
A)
Subtract $45 from the bank's balance and add $45 to the book's balance.
B)
Subtract $45 from the bank's balance.
C)
Add $45 to the book balance.
D)
Subtract $45 from the book balance.
E)
Add $45 to the bank's balance.
123)
During the month of July, Clanton Industries issued a check in the amount of $845 to a supplier on
account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation,
the company should:
A)
Add the check amount to the bank balance.
B)
Deduct the check amount from the book balance of cash.
C)
Add the check amount to the book balance of cash.
D)
Make a journal entry in the company records for an error.
E)
Deduct the check amount from the bank balance.
124)
In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles
the following information:
Cash balance per company books on April 30
$6,275
Deposits in transit at month-end
$1,300
Outstanding checks at month-end
$620
Bank charge for printing new checks
$45
Note receivable and interest collected by bank on Donahue's behalf
$770
A check paid to Donahue during the month by a customer is returned by the
bank as NSF
$480
The adjusted cash balance per the books on April 30 is:
A) $6,900 B) $5,840 C) $4,600 D) $6,520 E) $8,160
125)
In the process of reconciling its bank statement for January, Maxi's Clothing's accountant compiles
the following information:
Cash balance per company books on January 30
$4,725
Deposits in transit at month-end
$1,800
Outstanding checks at month-end
$520
Bank service charges
$25
EFT automatically deducted monthly, not yet recorded by Maxi
$380
An NSF check returned on a customer account
59
$265
An NSF check returned on a customer account
$265
The adjusted cash balance per the books on January 31 is:
A) $4,055 B) $4,585 C) $5,335
D) $4,815
E) $5,855
