Match the action with the category of internal control procedures
a. One department should check on another
b. Internal audit staff ensure all is working as intended
c. Accounting and cash collection is properly separated
d. Blank checks are locked at all times when not in use
e. Origination of initial entry into accounting system
f. Specific authority is given by management for the performance of activities.
Proper authorization
The origins of single-entry accounting were documented in a book written by Pacioli
over 500 years ago. It includes the concepts of bookkeeping that are still applied today.
a. True
b. False
On April 1, Blake Sales decides to establish a $275.00 Petty Cash Account to relieve the
burden on Accounting.
(a) Journalize this event. (b) On August 15th, the petty cash fund has receipts for mail
and postage of $124.75, contributions and donations of $53.25, meals and entertainment
of $63.85 and $32.75 in cash. Journalize the replenishment of the fund. (c) On August
16th, Blake Sales decides to increase petty cash to $400.00. Journalize this event.
Knife Corp. Use the selected data presented below from the financial statements of
Knife Corp. for 2016 and 2015 to answer the questions that follow.
Refer to the data for Knife Corp. REQUIRED:
(A) Calculate the dividend yield ratio for 2016 for Knife. Explain.
(B) What factors could have caused the change in the market value of Knife’s stock
from 2015 to 2016? Explain.
Upon review of Young’s Garden Center statement of cash flows, the following was
noted:
From this information, the most likely explanation is that Young’s is
a. using cash from operations and selling long-term assets to pay back debt.
b. using cash from operations and borrowing to purchase long-term assets.
c. using its profits to expand growth.
d. using cash from investors to provide for operations
For each of the following items, indicate whether it would appear on a statement of
cash flows prepared using the Direct method (a) or the Indirect method (b).
a. Direct
b. Indirect
Payments on accounts payable
Which of the following terms does not describe an interest rate used to calculate the
interest expense on the income statement?
a. Nominal rate
b. Market rate
c. Effective rate
d. Yield rate
Use the following codes to indicate how the cash flow effect, if any, of each transaction
would be reported on a statement of cash flows if the operating activities section is
prepared using the direct method.
a. Inflow from operating activity
b. Outflow from operating activity
c. Inflow from investing activity
d. Outflow from investing activity
e. Inflow from financing activity
f. Outflow from financing activity
g. Noncash investing and financing activity
h. Not reported on statement of cash flows
Paid interest on bonds.
Watson Company has 5,000 shares of $5 par, 3% preferred stock outstanding, and
25,000 shares of $2 par common stock outstanding. The preferred stock is cumulative
and no dividends have been paid for the past two years. If the company wishes to
distribute $2 per share to the common stockholders, what is the total amount of
dividends that must be paid in the current year?
a. $ 2,250
b. $50,000
c. $50,750
d. $52,250
All of the following are the types of activities that businesses engage in except :
a. financing activities.
b. investing activities.
c. operating activities.
d. organizational activities.
Whispering Pines Company reported the following on its balance sheet at December 31,
2014: Accounts receivable, less allowance of $12,400 $318,000 A) How much is the net
realizable value of Whispering Pines’ receivables? B) What is the balance of the
accounts receivable account? C) Are you able to determine whether Whispering Pines
uses the allowance method or the direct write off method for uncollectibles? Why or
why not?