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Financial and Managerial Accounting: The Basis for Business Decisions, 12/e

Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Financial Assets

Multiple Choice Quiz

Please answer all questions


1	Which of the following should not be included as part of cash on the balance sheet?
		A)	The amount of petty cash at year-end.
		B)	Outstanding checks at year-end.
		C)	Deposits in transit at year-end.
		D)	Checks received from customers.


2	The financial statement which shows cash activity (receipts and disbursements) during the accounting period is called a(n):
		A)	Bank statement.
		B)	Income statement.
		C)	Statement of cash flows.
		D)	Bank reconciliation.


3	The principal purpose of a voucher system is to provide assurance that:
		A)	All cash receipts are deposited intact in the bank.
		B)	All cash disbursements are approved before a check is issued.
		C)	All cash receipts are recorded in the accounting records.
		D)	All credit sales will be collectible.


4	When a voucher system is in use, the finance department has access to each of the following except:
		A)	Perforated voucher and support.
		B)	Signed check.
		C)	Approved voucher and support.
		D)	Check register.


5	Which of the following is not disclosed in a bank reconciliation?
		A)	Error made by the depositor in recording the amount of a check received from a customer.
		B)	Error made by the bank in recording the amount of cash disbursement.
		C)	Check received from a customer which proved to be uncollectible.
		D)	Amount stolen by a salesclerk who did not ring up several cash sales.


6	During preparation of a bank reconciliation, interest earned on the average bank balance during the month should be:
		A)	Deducted from the cash balance per accounting records.
		B)	Added to the cash balance per accounting records.
		C)	Deducted from the balance per bank statement.
		D)	Added to the balance per bank statement.


7	A company which uses the direct write-off method recognizes uncollectible accounts expense:
		A)	As a percentage of net sales during the period.
		B)	As a percentage of net credit sales during the period.
		C)	As indicated by aging the accounts receivable at the end of the period.
		D)	As specific accounts receivable are determined to be worthless.

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