1. Cash control systems are the methods and procedures used to ensure -- a. That current obligations are metb. That excess cash does not existsc. The safeguarding of cashd. That unused cash is invested 2. Bank reconciliation - a. Is the process of transferring money in or out of a bank accountb. Requires that every transaction which will result in a cash payment be verified, approved and recorded before a bank check is prepared.c. Is an analysis that reflects the bank transactions made by the depositord. Explains the difference between the bank balance and the balance shown in the depositor’s records 3. The journal entries for bank reconciliation - a. are taken from the balance per bank onlyb. may include a debit to office expense for bank service chargesc. may include a credit to accounts receivable for an NSF checkd. may include a debit to accounts payable for an NSF check 4. All cash receipts are deposited intact and all cash disbursements are made by means of check. This internal control is known as -- a. Administrative controlb. Imprest systemc. Accounting controld. Auditing control 5. A cash short or over account -- a. Is not generally acceptedb. Is debited when the petty cash fund proves out overc. Is debited when the petty cash fund proves out shortd. Is a contra account to cash 6. Entries to record the replenishment of petty cash fund results in a debit to various expense accounts and a credit to cash in bank. This accounting procedures typically exemplifies -- a. Imprest petty cash systemb. Fluctuating petty cash systemc. Internal controld. Administrative control 7. The following statements relate to cash. Which statement is true? a. The term “cash equivalent” refers to demand credit instruments such as money order and bank drafts.b. The purpose of establishing a petty cash fund is to keep enough cash on hand to cover all normal operating expenses for a period of time.c. Classification of a restricted cash balance as current or noncurrent should parallel the classification of the related obligation for which the cash was restricted.d. Compensating balances required by a bank should always be excluded from “ cash and cash equivalent” 8. The petty cash fund account under the Imprest fund system is debited -- a. Only when the fund is createdb. When the fund is created and every time it is replenished.c. When the fund is created and when the size of the fund is increased.d. When the fund is created and when the fund is decreased. 9. Petty cash fund is -- a. Separately classified as current assetb. Money kept on hand for making minor disbursements of coinand currency rather than by writing checksc. Set aside for the payment of payrolld. Restricted cash 10. Which of the following would not be classified as cash? a. Personal checksb. Travelers’ checksc. Cashiers’ checksd. Postdated checks 11. Which of the following should not be considered as cash for financial reporting purposes? a. Petty cash funds and change fundsb. Money orders, certified checks and personal checksc. Coins, currency and available fundsd. Postdated checks and IOUs 12.Compensating balance agreements … (choose the incorrect one) a. Reduces the amount available to the borrowerb. Always involves legal restrictions on the compensating balancec. Increases the effective interest rate to the borrowerd. Should be disclosed in the notes to financial statements 13. When preparing a bank reconciliation, bank credits are - a. Added to the bank statement balanceb. Deducted from the bank statement balancec. Added to the balance per bookd. Deducted from the balance per book 14. Bank reconciliations are normally prepared on a monthly basis to identify adjustments in the depositor’s records and to identify errors. Adjustments should be recorded by the depositor for -- a. Bank errors, outstanding checks and deposits in transitsb. All items, except bank errors, outstanding checks and deposits in transitsc. Book errors and bank errorsd. Bank service charges, NSF checks, outstanding checks and deposits in transits 15. Which of the following should be considered as cash? a. Certificates of depositsb. Money market checking accountsc. Money market savings certificatesd. Postdated checks

Question

1. Cash control systems are the methods and procedures used to ensure -- a. That current obligations are metb. That excess cash does not existsc. The safeguarding of cashd. That unused cash is invested 2. Bank reconciliation - a. Is the process of transferring money in or out of a bank accountb. Requires that every transaction which will result in a cash payment be verified, approved and recorded before a bank check is prepared.c. Is an analysis that reflects the bank transactions made by the depositord. Explains the difference between the bank balance and the balance shown in the depositor’s records 3. The journal entries for bank reconciliation - a. are taken from the balance per bank onlyb. may include a debit to office expense for bank service chargesc. may include a credit to accounts receivable for an NSF checkd. may include a debit to accounts payable for an NSF check 4. All cash receipts are deposited intact and all cash disbursements are made by means of check. This internal control is known as -- a. Administrative controlb. Imprest systemc. Accounting controld. Auditing control 5. A cash short or over account -- a. Is not generally acceptedb. Is debited when the petty cash fund proves out overc. Is debited when the petty cash fund proves out shortd. Is a contra account to cash 6. Entries to record the replenishment of petty cash fund results in a debit to various expense accounts and a credit to cash in bank. This accounting procedures typically exemplifies -- a. Imprest petty cash systemb. Fluctuating petty cash systemc. Internal controld. Administrative control 7. The following statements relate to cash. Which statement is true? a. The term “cash equivalent” refers to demand credit instruments such as money order and bank drafts.b. The purpose of establishing a petty cash fund is to keep enough cash on hand to cover all normal operating expenses for a period of time.c. Classification of a restricted cash balance as current or noncurrent should parallel the classification of the related obligation for which the cash was restricted.d. Compensating balances required by a bank should always be excluded from “ cash and cash equivalent”  8. The petty cash fund account under the Imprest fund system is debited -- a. Only when the fund is createdb. When the fund is created and every time it is replenished.c. When the fund is created and when the size of the fund is increased.d. When the fund is created and when the fund is decreased.  9. Petty cash fund is -- a. Separately classified as current assetb. Money kept on hand for making minor disbursements of coinand currency rather than by writing checksc. Set aside for the payment of payrolld. Restricted cash  10. Which of the following would not be classified as cash? a. Personal checksb. Travelers’ checksc. Cashiers’ checksd. Postdated checks 11. Which of the following should not be considered as cash for financial reporting purposes? a. Petty cash funds and change fundsb. Money orders, certified checks and personal checksc. Coins, currency and available fundsd. Postdated checks and IOUs 12.Compensating balance agreements … (choose the incorrect one) a. Reduces the amount available to the borrowerb. Always involves legal restrictions on the compensating balancec. Increases the effective interest rate to the borrowerd. Should be disclosed in the notes to financial statements 13. When preparing a bank reconciliation, bank credits are - a. Added to the bank statement balanceb. Deducted from the bank statement balancec. Added to the balance per bookd. Deducted from the balance per book 14. Bank reconciliations are normally prepared on a monthly basis to identify adjustments in the depositor’s records and to identify errors. Adjustments should be recorded by the depositor for -- a. Bank errors, outstanding checks and deposits in transitsb. All items, except bank errors, outstanding checks and deposits in transitsc. Book errors and bank errorsd. Bank service charges, NSF checks, outstanding checks and deposits in transits 15. Which of the following should be considered as cash? a. Certificates of depositsb. Money market checking accountsc. Money market savings certificatesd. Postdated checks

Accepted Answer

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