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Accounting 201 Exam Questions With Correct Marking Scheme
Typology: Exams
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The principles of internal control include _____. - ANSWER establish responsibilities
An internal control system consists of the policies and procedures managers use to _____.
-ensure reliable accounting
-protect assets
-promote efficient operations
-uphold company policies
-all of the above - ANSWER all of the above
An effective system of internal control _____. - ANSWER helps protect company assets
The Sarbanes-Oxley Act _____. - ANSWER requires managers of public companies to document and assess the effectiveness of all internal control processes that impact financial reporting
Separation of duties _____. - ANSWER divides responsibility for a transaction between two or more individuals
The company's balance sheet on September 30, reflects cash and cash equivalents of _____. - ANSWER $109,
Currency and coins on hand of $12,500 + Checking account balance of $35,000 + Customer checks on hand (not yet deposited) of $2,000 + Money market fund balance of $50,000 + Investment in 3-month U.S. Treasury bills of $10,000 = Total cash and cash equivalents of $109,500. The investment in Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close to its due date so that its market value is not sensitive to interest rate changes.
Cash management principles include all of the following except _____. - ANSWER maximize other assets
At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of cash sales for the day. However, when the clerk and the supervisor count the cash in the register, the count reveals that $1,050 was actually collected from customers. Complete the following journal entry by selecting the account names and dollar amounts from the drop-down menus. - ANSWER (D) Cash $
(D) Cash Over and Short $
(C)Sales $
All of the following statements regarding a voucher system are incorrect except _____.
-all companies use the same standardized voucher system
-an invoice approval initiates the recording of a purchase
-for control purposes, department managers may place orders directly with suppliers in a well-designed voucher system
-a voucher system is commonly used in small companies to compensate for the lack of other internal controls
-a well-designed voucher system will prevent all errors and fraud - ANSWER an invoice approval initiates the recording of a purchase
June:
The unadjusted balance of the company's Cash account was $26,620 at the end of June.
The bank statement shows a balance on June 30 of $26,960.
Outstanding checks totaled $4,000 at June 30.
Deposit in transit totaled $3,000 on June 30.
The bank statement included a credit memorandum in the amount of $150 for interest.
Check #1221 (in payment of account payable) was written for $4,900, but recorded in the accounting records as $4,090.
Select the appropriate items to complete the bank reconciliation. - ANSWER Maribel June 30 BS balance Book balance
Opening balance $26,960 $26,
Add Dtransit $3K Interest $
Deduct OC $4K ERROR $
Adjusted BB $25,960 $25,
The company's bank reconciliation on June 30 included outstanding checks that totaled $4,000 at June 30. Does the company need to prepare a journal entry relating to this item to adjust the book balance to the correct balance? - ANSWER NO
The company's bank reconciliation on June 30 included deposits in transit that totaled $3,000 on June 30. Does the company need to prepare a journal entry relating to this item to adjust the book balance to the correct balance? - ANSWER NO
The company's bank reconciliation on June 30 included a credit memorandum in the amount of $150 for interest. Does the company need to prepare a journal entry relating to this item to adjust the book balance to the correct balance? -
The company's bank reconciliation on June 30 included check #1221 (in payment of an account payable) written for $4,900, but recorded in the accounting records as $4,090. Does the company need to prepare a journal entry relating to this item to adjust the book balance to the correct balance? - ANSWER YES
The company's bank reconciliation at June 30 included the following item. The bank statement included a credit memorandum in the amount of $150 for interest. Complete the necessary journal entry by selecting the account names and dollar amounts from the drop-down menus. - ANSWER (D) Cash $
(C) Interest Revenue $
The company's bank reconciliation on June 30 included check #1221 (in payment of an account payable) written for $4,900, but recorded in the accounting records as $4,090. Complete the seller's necessary journal entry by selecting the account names and dollar amounts from the drop-down menus. - ANSWER (D) Accounts Payable $
(C) Cash $
When the company's bank reconciliation was prepared, one of the adjustments to the balance per books included an NSF check in the amount of $75 (that was received from a customer in payment of her account). The journal entry to record this item includes a _____. - ANSWER debit to Accounts Receivable in the amount of $
The company's days' sales uncollected is closest to _____. - ANSWER 53.7 days
Days' sales uncollected = Ending Accounts Receivable of $125,000 / Net Sales of $850,000 x 365 = 53.7 days