can someone please help me answer these financial accounting questions?

ch7 study guide

1.

The safeguarding of assets is an objective of a company's system of internal control.

A) True

B) False

2.

Electronic funds transfer (EFT) is a disbursement system that uses a telephone or a computer to transfer cash from one location to another.

A) True

B) False

Multiple Choice

3.

The following information was taken from Hobson Company cash budget for the month of June

If the company has a policy of maintaining end-of-the-month cash balance of $75,000, the amount the company would have to borrow is

A) $30,000.

B) $15,000.

C) $0

D) $45,000.

4.

Which of the following is not one of the main factors that contribute to fraudulent activity?

A) Opportunity.

B) Incompatible duties.

C) Financial pressure.

D) Rationalization.

5.

All of the following bank reconciliation items would result in an adjusting entry on the company’s books except

A) interest earned.

B) deposits in transit.

C) fee for collection of note by bank.

D) NSF check of customer.

6.

A debit balance in Cash Over and Short is reported as a

A) contra asset.

B) miscellaneous asset.

C) miscellaneous expense.

D) miscellaneous revenue.

7.

For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

A) Check for $43 recorded as $34.

B) Deposit of $500 recorded by bank as $50.

C) A returned $200 check recorded by bank as $20.

D) Check for $35 recorded as $53.

8.

A petty cash fund should be replenished

A) every day.

B) at the end of every accounting period.

C) once a year.

D) as soon as an expense is paid from the fund.

9.

Of the following employees, who should prepare the bank reconciliation?

A) Anne, the bookkeeper, because she is aware of all transactions that affected cash.

B) Michael, the treasurer, because he has control of the checkbook and has taken more accounting courses than any other employee.

C) Mary, the cashier, because she does not pay bills.

D) Frank, the purchasing agent, because he does not work in the accounting department.

10. From an internal control standpoint, the asset most susceptible to improper diversion and use is

A) prepaid insurance.

B) cash.

C) buildings.

D) land.

11. Dobler Company gathered the following reconciling information in preparing its June bank reconciliation:

The adjusted cash balance per books on June 30 is

A) $5,075.

B) $4,940.

C) $4,775.

D) $5,055.

12. The use of prenumbered checks is an example of

A) documentation procedures.

B) independent internal verification.

C) establishment of responsibility.

D) segregation of duties.

13. A check returned by the bank marked "NSF" means

A) no service fee.

B) no signature found.

C) not satisfactorily filled out.

D) not sufficient funds.

14. Ron Jones has been a trusted employee for over 10 years. He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items. Which internal control principle, if any, is being violated?

A) None, Ron has proven to be trustworthy and has enough experience to do a good job.

B) Documentation procedures.

C) Establishment of responsibilities.

D) Segregation of duties.

15. A $100 petty cash fund has cash of $18 and receipts of $86. The journal entry to replenish the account would include a

A) debit to Cash for $86.

B) credit to Petty Cash for $86.

C) credit to Cash Over and Short for $4.

D) credit to Cash for $86.

16. Bonding involves all of the following except

A) The company obtains insurance protection against misappropriation of assets by a dishonest employee.

B) The insurance company screens employees before they are added to the policy.

C) The company informs employees that the insurance company will vigorously prosecute all offenders.

D) Employees do not commit inappropriate acts because of the threat of prosecution and their loyalty to the employer.

17. Sam’s Grocery Store has the following policy. ‘Only one cashier can have access to a cash drawer.’ Which internal control principle supports this policy?

A) Documentation procedures.

B) Segregation of duties.

C) Physical controls.

D) Establishment of responsibilities.

18. Nilson Company gathered the following reconciling information in preparing its August bank reconciliation:

The adjusted cash balance per books on August 31 is

A) $8,320.

B) $8,020.

C) $4,620.

D) $4,920.

19.

Which of the following bank reconciliation items would not result in an adjusting entry?

A) Service charge.

B) Outstanding checks.

C) NSF check of customer.

D) Collection of a note by the bank.

20.

A very small company would have the most difficulty in implementing which of the following internal control activities?

A) Separation of duties.

B) Limited access to assets.

C) Periodic independent verification.

Update:

thanks alot in advance

this is the information i left out for questions 3,11,18

3. The following information was taken from Hobson Company cash budget for the month of June

Beginning cash balance $90,000

Cash receipts $87,000

Cash disbursements $102,000

If the company has a policy of maintaining end-of-the-month cash balance of $75,000, the amount the company would have to borrow is

A) $30,000.

B) $15,000.

C) $0

D) $45,000

11. Dobler Company gathered the following reconciling information in preparing its June bank reconciliation:

Cash balance per books, 6/30 4,200

Deposits in transit 300

Notes receivable and interest collected by bank 740

Bank charge for check printing 25

Outstanding checks 1,500

NSF check

1 Answer

Relevance
  • Anonymous
    8 years ago
    Favorite Answer

    1. True

    2. True

    3. is there additional information you left out?

    4. B

    5. D ( 75% sure)

    6/. Dunno what a Cash over and Short account is ( answer is either A or B)

    7. A

    8. Should be once a month, guessing B most closely fits

    9, Figure out which has proper segregation of duties. Should not have authorization, or control.

    10.B

    11

    12. A

    13. non sufficient funds buddy

    14. d

    15. im not a bookkeeper

    20. a

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