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Interactive Quiz
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1
Which of the following is not considered a highly liquid asset?
A)Cash in the company checking account.
B)Cash in the company savings account.
C)Currency and coins.
D)Inventory held for sale to customers.
E)A customer's check dated today which will be deposited in the company's checking account.
2
At any given point in time, the sum of the actual cash in the petty cash fund and the filled-in Petty Cash Receipts in the petty cash box should be equal to:
A)The balance of the actual cash in the petty cash box.
B)The sum of the Petty Cash Receipts that are in the petty cash box.
C)The value of the petty cash fund as shown in the balance sheet.
D)The sum of the original cash in the petty cash box minus the amount of actual cash at the present time.
E)None of the above.
3
At the end of the current accounting period, the petty cash fund has $300 of cash and $700 of Petty Cash receipts. The total of the petty fund is $1,000. The company's materiality threshold is $250. If the petty cash fund is not replenished at the end of the accounting period, the accounting principle that has most likely been violated is the:
A)Going-concern principle.
B)Historical cost principle.
C)Monetary unit principle.
D)Entity principle.
E)Matching principle.
4
What effect does a Debit Memo issued by the bank have on our checking account with the bank?
A)To the bank, our account is an asset so a Debit Memo will increase the account.
B)To the bank, our account is an asset so a Debit Memo will decrease the account.
C)To the bank, our account is a liability so a Debit memo will increase the account.
D)To the bank, our account is a liability so a Debit Memo will decrease the account.
E)None of the above.
5
Which of the following events would require that the Petty Cash account be credited?
A)The Petty Cash account is being increased.
B)The Petty Cash account is being decreased.
C)The Petty Cash fund is short by $3.50.
D)The Petty Cash fund is over by $4.50.
E)None of the above.
6
Which of the following statements is false if the petty cash fund is not replenished at the end of the accounting period?
A)Net income will be overstated or net loss will be understated.
B)Liabilities will be overstated on the balance sheet.
C)The cash for the firm will be overstated.
D)The expenses will be understated.
E)The income statement and the balance sheet will not be correct.
7
To increase the petty cash fund for a department requires a journal entry that will do which of the following?
A)Debit Cash and credit Petty Cash.
B)Debit Petty Cash and credit Cash.
C)Debit Miscellaneous Expense and credit Cash.
D)Debit Accounts Receivable and credit Petty Cash.
E)Debit Accounts Payable and credit Petty Cash.
8
The bookkeeper incorrectly recorded a bank deposit as $840, but the bank recorded the deposit at its correct amount of $420. How will this error be treated on the bank reconciliation?
A)Addition per bank statement balance.
B)Deduction per book balance of cash.
C)Addition per book balance of cash.
D)Deduction per bank statement balance.
E)None of the above.
9
What is the proper treatment on the bank reconciliation for interest paid by the bank to the depositor?
A)Added to the book balance.
B)Deducted from the book balance.
C)Added to the bank balance.
D)Deducted from the bank balance.
E)None of the above.
10
What is the journal entry for a customer's NSF check that is returned with the bank statement?
A)Debit Accounts Receivable and credit Cash.
B)Debit Revenue and credit Cash.
C)Debit NSF Expense and credit Cash.
D)Debit Cash and credit Accounts Receivable.
E)None of the above.
11
Making sure assets are protected from various types of losses is a description of which of the following principles of internal control?
A)Responsibilities should be clearly established.
B)Adequate records should be maintained.
C)Assets should be insured and employees bonded.
D)Recordkeeping and custody should be combined.
E)Mechanical devices should be used whenever practicable.
12
At the end of the day, the clerk (who works at the cash register): (1) counts the money in the cash drawer, (2) records the amount of the count, (3) forwards a record of the count and the cash to the company cashier. This procedure does which of the following?
A)Adheres to internal control principles.
B)Provides adequate internal control over cash.
C)Separates recordkeeping and the custody of assets.
D)Follows the broad principle of internal control of insuring assets.
E)All of the above.
13
Management's ability to monitor and control business operations is greatly improved with a computerized accounting system because of all but which one of the following?
A)Computers provide more rapid access to information.
B)Computers allow data to be presented in many different reports and formats.
C)Computers provide access to large quantities of information.
D)Data entry errors are always discovered in the early stages.
E)None of the above.
14
The Sarbanes-Oxley Act (SOX) requires:
A)Auditors of public issuers are overseen by the Public Company Accounting Oversight Board.
B)Auditors of public issuers must evaluate their clients' internal controls.
C)Auditors of public issuers must render an opinion on their clients' internal controls.
D)All of the above.
E)None of the above.
15
Alpha Company reports current accounts receivable of $356,000 and net sales of $2,143,000. Its days' sales uncollected is:
A)43 days.
B)61 days.
C)97 days.
D)56 days.
E)None of the above.





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