Question 1

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Accepted Answer

A)   bank statement.
B)   bank reconciliation statement.
C)   bank control account.
D)   cash flow statement.E) B) and D)
F) B) and C)

Question 2

In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

Accepted Answer

A)   Dr Accounts receivable$750 \quad \quad  Cr Cash$750
B)   Dr Accounts receivable$750 \quad \quad  Cr Inventory$750
C)   Dr Accounts payable$750 \quad \quad \quad  Cr Cash$750
D)   Cr Accounts receivable$750 \quad \quad  Dr Cash$750 E) A) and D)
F) All of the above

Question 3

Segregation of duties involves:

Accepted Answer

A)   ensuring that only qualified accountants are employed in the accounting department.
B)   separation of record-keeping from handling of assets.
C)   providing each staff member with an individual password.
D)   separating the tasks of employees.E) B) and C)
F) A) and D) B

Question 4

Alison Ltd's bank statement showed a debit balance of $7000 at 31 December.It also showed bank service charges of $1100 and a direct credit received from a customer for the company amounting to $300.Unpresented cheques were $700 and there was an outstanding deposit for $2300
-What was the final bank balance in Alison Ltd's ledger at 31 December?

Accepted Answer

A)   $5400 Dr
B)   $5400 Cr
C)   $8600 Dr
D)   $8600 CrE) B) and D)
F) A) and C)

Question 5

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Accepted Answer

A)   add it to the balance as per bank statement.
B)   deduct it from the balance as per bank statement.
C)   add it to the balance per company records.
D)   deduct it from the balance per company records.E) A) and B)
F) None of the above

Question 6

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Accepted Answer

A)   add it to the balance as per bank statement.
B)   deduct it from the balance as per bank statement.
C)   add it to the balance per company records.
D)   deduct it from the balance per company records.E) A) and B)
F) A) and C)

Question 7

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Accepted Answer

A)   Dr Bank charges \quad \quad \quad  Cr Cash
B)   Dr Cash \quad \quad \quad \quad \quad \quad  Cr Other revenue
C)   Dr Cash \quad \quad \quad \quad \quad \quad  Cr Accounts payable
D)   Dr Accounts payable \quad \quad  Cr Cash E) A) and B)
F) B) and D) A

Question 8

Included in the bank statement was a debit for an NSF (not sufficient funds) cheque received from a customer.What entry is required in the company's accounts?

Accepted Answer

A)   Dr Other revenue \quad \quad \quad  Cr Cash
B)   Dr Cash \quad \quad \quad \quad \quad \quad  Cr Other revenue
C)   Dr Cash \quad \quad \quad \quad \quad \quad  Cr Accounts receivable
D)   Dr Accounts receivable \quad \quad  Cr Cash E) None of the above
F) A) and B)

Question 9

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

Accepted Answer

A)   Error by the bank
B)   Error by the company
C)   Unpresented cheques at end of the month
D)   Receipts not yet bankedE) None of the above
F) B) and D)

Question 10

Simon Ltd's bank statement showed a credit balance of $14 000 at 31 October.It also showed bank service charges of $2200 and a direct credit received from a customer amounting to $600.Unpresented cheques were $1400 and there was an outstanding deposit for $4600.
- What was the bank balance in Simon Ltd's books at 31 October before the adjustments?

Accepted Answer

A)   $15600 Dr
B)   $15800 Cr
C)   $17200 Cr
D)   $18800 DrE) A) and B)
F) All of the above

Question 11

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

Accepted Answer

A)   add it to the balance as per bank statement.
B)   deduct it from the balance as per bank statement.
C)   add it to the balance per company records.
D)   deduct it from the balance per company records.E) None of the above
F) B) and D)

Question 12

Which of the following statements about the bank statement is NOT true?

Accepted Answer

A)   The bank statement shows the amount payable by the customer.
B)   The bank statement summarises the activity in a cheque account.
C)   If the customer of the bank has a substantial bank overdraft,the closing balance will normally be a debit.
D)   It is the source document for bank charges.E) None of the above
F) A) and C)

Question 13

The debit recorded in the journal to reimburse the petty cash fund is to:

Accepted Answer

A)   petty cash.
B)   accounts receivable.
C)   cash.
D)   various accounts for which the petty cash was disbursed.E) B) and C)
F) A) and C)

Question 14

In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

Accepted Answer

A)   the outstanding cheques of $9400 and the deposit in transit of $2900.
B)   the direct credit for $500 and the interest charge of $760.
C)   only the interest on overdraft charge of $760.
D)   the direct credit for $500,the interest charge of $760 and outstanding cheques of $9400.E) All of the above
F) A) and D)

Question 15

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Accepted Answer

A)   clear establishment of responsibility lines.
B)   maintenance of effective records.
C)   separation of record-keeping from handling assets.
D)   physical protection of sensitive assets.E) A) and D)
F) A) and C) D

Question 16

Tell Ltd's bank statement showed a credit balance of $7000 at 30 November.It also showed bank service charges of $1100 and the collection of a note for the company amounting to $300.Unpresented cheques were $700 and there was an outstanding deposit for $2300.
- What was the bank balance in Tell Ltd's books at 30 November before the adjustments?

Accepted Answer

A)   $7800 Dr
B)   $7900 Cr
C)   $8600 Cr
D)   $9400 DrE) None of the above
F) B) and C)

Question 17

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

Accepted Answer

A)   add it to the balance as per bank statement.
B)   deduct it from the balance as per bank statement.
C)   add it to the balance per company records.
D)   deduct it from the balance per company records.E) B) and C)
F) A) and D)

Question 18

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Accepted Answer

A)   discourages inefficient use of resources.
B)   helps management safeguard assets.
C)   assists management in controlling the enterprise.
D)   prevents collusion between employees.E) A) and B)
F) A) and C)

Question 19

Which of the following is NOT true of a sound system of internal control?

Accepted Answer

A)   Implementation of controls involves costs.
B)   A sound system of internal control is the responsibility of management.
C)   All errors and irregularities should be eliminated.
D)   A sound system of internal control is fundamental to the production of reliable financial reports.E) C) and D)
F) B) and D)

Question 20

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Accepted Answer

A)   add it to the balance as per bank statement.
B)   deduct it from the balance as per bank statement.
C)   add it to the balance per company records.
D)   deduct it from the balance per company records.E) All of the above
F) C) and D)

Exam 7: Internal Control and Cash

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Correct Answer
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In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

Correct Answer
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Segregation of duties involves:

Correct Answer
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B

Correct Answer
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In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Correct Answer
verified

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Correct Answer
verified

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Correct Answer
verified
A

Included in the bank statement was a debit for an NSF (not sufficient funds) cheque received from a customer.What entry is required in the company's accounts?

Correct Answer
verified

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

Correct Answer
verified

Correct Answer
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In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

Correct Answer
verified

Which of the following statements about the bank statement is NOT true?

Correct Answer
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The debit recorded in the journal to reimburse the petty cash fund is to:

Correct Answer
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In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

Correct Answer
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Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Correct Answer
verified
D

Correct Answer
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In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

Correct Answer
verified

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Correct Answer
verified

Which of the following is NOT true of a sound system of internal control?

Correct Answer
verified

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Correct Answer
verified

Exam 7: Internal Control and Cash

The statement that compares the balance as shown in the bank's records with the balance in the cash at bank account at a particular date is known as the:

Correct AnswerverifiedShow Answer

In preparing the monthly bank reconciliation,Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF.The journal entry to record this in Fur Ltd's books is:

Correct AnswerverifiedShow Answer

Segregation of duties involves:

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for interest earned on account,$240,is to:

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Correct AnswerverifiedShow Answer

Included in the bank statement was a debit for bank service charges.What entry is required in the company's accounts?

Correct AnswerverifiedA

Included in the bank statement was a debit for an NSF (not sufficient funds) cheque received from a customer.What entry is required in the company's accounts?

Correct AnswerverifiedShow Answer

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

Correct AnswerverifiedShow Answer

Which of the following statements about the bank statement is NOT true?

Correct AnswerverifiedShow Answer

The debit recorded in the journal to reimburse the petty cash fund is to:

Correct AnswerverifiedShow Answer

In preparing the monthly bank reconciliation,Jon Ltd ascertains that there is a direct credit from a customer for $500 and an interest on overdraft charge of $760.Outstanding cheques total $9400 and there is a deposit in transit for $2900.It will be necessary to make journal entries for:

Correct AnswerverifiedShow Answer

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Correct AnswerverifiedD

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for a cheque outstanding at end of month,$450,is to:

Correct AnswerverifiedShow Answer

Which of the following is NOT correct? An effective internal control system for any organisation is one that:

Correct AnswerverifiedShow Answer

Which of the following is NOT true of a sound system of internal control?

Correct AnswerverifiedShow Answer

In preparing a bank reconciliation statement for a business with a substantial bank balance,the appropriate treatment for monthly bank service charges,$30,appearing on the bank statement is to:

Correct AnswerverifiedShow Answer

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B

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A

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D

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