a. Opportunity.
b. Incompatible duties.
c. Financial pressure.
d. Rationalization.
a. independent outside auditors must attest to the level of internal control.
b. companies must develop sound internal controls over financial reporting.
c. companies must continually assess the functionality of internal controls.
d. independent outside auditors must eliminate redundant internal controls.
a. Safeguard company assets.
b. Overstate liabilities in order to be conservative.
c. Enhance the accuracy and reliability of accounting records.
d. Reduce the risks of errors.
a. Safeguard company assets.
b. Enhance the accuracy and reliability of accounting records.
c. Fairness of the financial statements.
d. Reduce the risks of errors.
a. using prenumbered documents.
b. reconciling the bank statement.
c. customer satisfaction surveys.
d. insistence that employees take vacations.
a. an extensive marketing plan.
b. bonding of employees.
c. separation of duties.
d. recording of all transactions.
a. limited access to assets.
b. independent internal verifications.
c. authorization of transactions.
d. generic design of documents.
a. Cost of establishing control procedures should not exceed their benefit.
b. The human element.
c. Collusion.
d. The size of the company.
a. only manual systems of accounting.
b. the extent of government regulations.
c. safeguarding assets.
d. preparing income tax returns.
a. all balance sheet accounts.
b. assets.
c. liabilities.
d. capital stock.
a. Everyone in the organization.
b. An individual and his/her supervisor.
c. Only one individual.
d. The CEO.
a. natural disasters.
b. employee theft.
c. robbery.
d. unauthorized use.
a. increases the potential for errors and fraud.
b. decreases the potential for errors and fraud.
c. is an example of good internal control.
d. is a good example of safeguarding the company’s assets.
a. have access to the accounting records for that asset.
b. be someone outside the company.
c. not have access to the accounting records for that asset.
d. be an accountant.
a. are hired by CPA firms to audit business firms.
b. are employees of the IRS who evaluate the internal controls of companies filing tax returns.
c. evaluate the system of internal controls for the companies that employ them.
d. cannot evaluate the system of internal controls of the company that employs them because they are not independent.
a. a fraud committee.
b. collusion.
c. a division of duties.
d. bonding of employees.
a. prepaid insurance.
b. cash.
c. buildings.
d. land.
a. adherence to prescribed managerial policies.
b. promotion of operational efficiency.
c. reliability of accounting data.
d. insistence that employees not take earned vacations.
a. theft by employees becomes impossible.
b. operations become extremely inefficient because of constant training of employees.
c. more employees will need to be bonded.
d. theft is still possible when several employees are involved.
a. Separation of duties.
b. Limited access to assets.
c. Periodic independent verification.
d. Sound personnel procedures.
a. one person being responsible for one task.
b. authorization of transactions.
c. independent internal verification.
d. approval of transactions.
a. establishment of responsibility.
b. independent internal verification.
c. separation of duties.
d. rotation of duties.
a. a violation of establishment of responsibility.
b. a violation of separation of duties.
c. supporting the establishment of responsibility.
d. supporting internal independent verification.
a. establishment of responsibility is violated.
b. independent internal verification is violated.
c. documentation procedures is violated.
d. separation of duties is violated.
a. ordering the merchandise.
b. making a sale.
c. shipping the goods.
d. billing the customer.
a. ordering, receiving, paying.
b. ordering, selling, paying.
c. ordering, shipping, billing.
d. selling, shipping, paying.
a. documentation procedures are violated.
b. independent internal verification is violated.
c. segregation of duties is violated.
d. establishment of responsibility is violated.
a. cashier department supervisors.
b. vaults.
c. safety deposit boxes.
d. locked warehouses.
a. computer operators.
b. management.
c. internal auditors.
d. outside CPAs.
a. it is made on a pre-announced basis.
b. it is done by the employee possessing custody of the asset.
c. discrepancies are reported to management.
d. it is done at the time of the audit.
a. it means that they are not allowed to handle cash.
b. they have worked for the company for at least 10 years.
c. they have been insured against misappropriation of assets.
d. it is impossible for them to steal from the company.
a. bonding the employees.
b. getting the owner actively involved.
c. hiring only honest employees.
d. holding one person responsible for a given set of transactions.
a. human resource controls.
b. establishment of responsibility.
c. physical controls.
d. documentation procedures.
a. is infallible.
b. can be rendered ineffective by employee collusion.
c. invariably will have costs exceeding benefits.
d. is premised on the concept of absolute assurance.
a. Due to its liquid nature, cash is the easiest asset to steal.
b. A good system of internal control will ensure that employees will not be able to steal cash.
c. It takes two or more employees working together to be able to steal cash.
d. All of these answer choices are correct.
a. only apply to publicly traded companies.
b. are in place to safeguard assets.
c. can eliminate all irregularities in the accounting process.
d. All of these answer choices are correct.
a. Documentation procedures.
b. Segregation of duties.
c. Physical controls.
d. Establishment of responsibilities.
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.
a. History has shown that employees are generally dishonest and thus cannot be entrusted with performing related duties.
b. The work of one employee should, without duplication of effort, provide a reliable basis for evaluating the work of another employee.
c. Control is most effective when only one person is responsible for a give task.
d. Segregation of duties causes companies to hire more employees and thus it supports the economy.
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.
a. Money on deposit in a bank.
b. Coins.
c. NSF checks.
d. Petty cash.
a. Physical controls.
b. Documentation procedures.
c. Segregation of duties.
d. Mechanical controls.
a. Coins.
b. Money orders.
c. Currency.
d. Postdated checks.
a. other controls.
b. independent internal verification.
c. establishment of responsibility.
d. segregation of duties.
a. Payments should be made with cash.
b. There should be limited access to cash.
c. The amount of cash on hand should be kept to a minimum.
d. Cash should be deposited daily.
a. The number of persons who have access to cash should be limited.
b. The functions of record keeping and maintaining custody of cash should be combined.
c. Surprise audits of cash on hand should be made occasionally.
d. All cash receipts should be recorded promptly.
a. human resource controls.
b. independent internal verification.
c. establishment of responsibility.
d. segregation of duties.
a. Only designated personnel are authorized to handle cash.
b. The same individual receives the cash and pays the bills.
c. Surprise audits of cash on hand should be made occasionally.
d. Access to cash is limited.
a. All payments should be made with currency, not checks.
b. Banking facilities should be used as much as possible.
c. The amount of cash on hand should be kept to a minimum.
d. Employees who have access to cash should be bonded.
a. all bills are paid in cash.
b. disbursements are made by the accounts payable subsidiary clerk.
c. payments are made by check.
d. all purchases are made on credit.
a. Anyone can sign the checks.
b. Different individuals approve and make the payments.
c. Blank checks are stored with limited access.
d. The bank statement is reconciled monthly.
a. documentation procedures.
b. independent internal verification.
c. establishment of responsibility.
d. segregation of duties.
a. invoice.
b. remittance advice.
c. receiving report.
d. purchase order.
a. Record keeping and custodianship over cash should be performed by the same person.
b. Banking facilities should be used as little as possible.
c. All payments should be made with currency, not checks.
d. The amount of cash on hand should be kept to a minimum.
a. to an owner.
b. to employees as wages.
c. from petty cash.
d. to employees as loans.
a. documentation procedures.
b. separation of duties.
c. other controls.
d. establishment of responsibility.
a. should be safeguarded.
b. should be pre-signed.
c. do not need to be safeguarded since they must be signed to be valid.
d. should not be pre-numbered.
a. owner cash contributions.
b. mail receipts.
c. cash disbursement transactions.
d. sales transactions.
a. a telephone.
b. a telegraph.
c. a computer.
d. a telephone, telegraph, or computer.
a. lets a depositor know the financial position of the bank as of a certain date.
b. is a credit reference letter written by the depositor’s bank.
c. is a bill from the bank for services rendered.
d. shows the activities that increased or decreased the depositor’s account balance.
a. Bank service charge.
b. Collection of a note receivable.
c. Wiring of funds to other locations.
d. Checks marked NSF.
a. a contra asset account.
b. a liability account.
c. also an asset account.
d. a stockholders’ equity account.
a. debit.
b. credit.
c. debit memorandum.
d. credit memorandum.
a. postage due.
b. taxi fares.
c. administrative wages.
d. freight-out.
a. the bank statement will show a credit for deposits received from a company.
b. the bank statement balance will always agree with the company recorded balance.
c. the bank statement is a copy of the bank’s records sent to the customer for periodic review.
d. the bank statement will show a debit if a check is paid for a company issuing the check.
a. An accounting policies manual.
b. Tracing any debit memorandums from the bank to the company’s records.
c. The use of prenumbered checks.
d. A review of the cash budget.
a. credits.
b. debits
c. assets.
d. liabilities.
a. Addition to the balance per books.
b. Deduction from the balance per bank.
c. Addition to the balance per bank.
d. Deduction from the balance per books.
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. Service charges.
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. NSF check.
a. Outstanding checks.
b. NSF checks.
c. Check printing charge.
d. Service charges.
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. Service charges.
a. Outstanding checks.
b. Deposits in transit.
c. Notes collected by the bank.
d. Service charges.
a. no service fee.
b. no signature found.
c. not satisfactorily filled out.
d. not sufficient funds.
a. a bank service charge.
b. the issuance of traveler’s checks.
c. the wiring of funds.
d. the collection of a notes receivable.
a. whenever the bank refuses to lend the company money.
b. when an employee is suspected of fraud.
c. to explain any difference between the depositor’s balance per books with the balance per bank.
d. by the person who is authorized to sign checks.
a. have been recorded on the company’s books but not yet by the bank.
b. have been recorded by the bank but not yet by the company.
c. have not been recorded by the bank or the company.
d. are customers’ checks that have not yet been received by the company.
a. added to the balance per bank.
b. deducted from the balance per books.
c. added to the balance per books.
d. deducted from the balance per bank.
a. add $54 to the book’s balance.
b. subtract $54 from the book’s balance.
c. deduct $54 from the bank’s balance.
d. deduct $628 from the book’s balance.
a. added to the balance per books.
b. deducted from the balance per books.
c. added to the balance per bank.
d. deducted from the balance per bank.
a. Check for $63 recorded as $36.
b. Deposit of $600 recorded by bank as $60.
c. A returned $300 check recorded by bank as $30.
d. Check for $75 recorded as $57.
a. Check for $63 recorded as $36.
b. Deposit of $600 recorded by bank as $60.
c. A returned $300 check recorded by bank as $30.
d. Check for $75 recorded as $57.
a. Check written for $63, but recorded as $36.
b. Deposit of $600 recorded by bank as $60.
c. A returned $300 check recorded by bank as $30.
d. Check written for $57, but recorded as $75.
a. Check written for $63, but recorded as $36.
b. Deposit of $600 recorded by bank as $60.
c. A returned $300 check recorded by bank as $30.
d. Check written for $57, but recorded as $75.
a. Service charge.
b. Deposits in transit.
c. NSF check of customer.
d. Collection of a note by the bank.
a. An error by the bank.
b. Outstanding checks.
c. A bank service charge.
d. A deposit in transit.
a. interest earned.
b. deposits in transit.
c. fee for collection of note by bank.
d. NSF check of customer.
a. Accounts Receivable
Cash
b. Cash
Accounts Receivable
c. Miscellaneous Expense
Accounts Receivable
d. No adjusting entry is necessary.
a. $50,400.
b. $72,000.
c. $70,800.
d. $28,800.
Solution: $21,600 + $155,600 ? $105,200 = $72,000
a. $43,400.
b. $27,200.
c. $44,200.
d. $10,200.
Solution: $17,000 + $106,400 ? $79,200 = $44,200
Cash balance per books, 8/31 $21,000
Deposits in transit 900
Notes receivable and interest collected by bank 5,100
Bank charge for check printing 120
Outstanding checks 12,000
NSF check 1,020
The adjusted cash balance per books on August 31 is
a. $24,960.
b. $24,060.
c. $13,800.
d. $14,760.
Solution: $21,000 + $5,100 ? $120 ? $1,020 = $24,960
Cash balance per books, 4/30 $13,200
Deposits in transit 1,800
Notes receivable and interest collected by bank 4,440
Bank charge for check printing 150
Outstanding checks 9,000
NSF check 840
The adjusted cash balance per books on April 30 is
a. $18,450.
b. $17,640.
c. $16,650.
d. $18,330.
Solution: $13,200 + $4,440 ? $150 ? $840 = $16,650
Cash balance per bank, 9/30 $30,800
Note receivable collected by bank 16,800
Outstanding checks 25,200
Deposits in transit 12,600
Bank service charge 210
NSF check 3,360
Using the above information, determine the cash balance per books (before adjustments) for the Clark Company.
a. $27,370.
b. $43,400.
c. $4,970.
d. $42,000.
Solution: ($30,800 ? $25,200 + $12,600) ? $16,800 + $210 + $3,360 = $4,970
a. occur because of time lags.
b. must be corrected by debits.
c. are infrequent in occurrence.
d. are corrected by making an adjusting entry on the depositor’s books.
Cash balance per books, 10/31 $12,600
Deposits in transit 450
Notes receivable and interest collected by bank 2,550
Bank charge for check printing 60
Outstanding checks 6,000
NSF check 510
The adjusted cash balance per books on October 31 is
a. $14,130.
b. $12,030.
c. $8,580.
d. $14,580.
Solution: $12,600 + $2,550 ? $60 ? $510 = $14,580
Cash balance per books, 6/30 $8,400
Deposits in transit 600
Notes receivable and interest collected by bank 1,480
Bank charge for check printing 50
Outstanding checks 3,000
NSF check 280
The adjusted cash balance per books on June 30 is
a. $10,150.
b. $9,880.
c. $9,550.
d. $10,110.
Solution: $8,400 + $1,480 ? $50 ? $280 = $9,550
Cash balance per bank, 12/31 $20,000
Note receivable collected by bank 10,000
Outstanding checks 15,000
Deposits in transit 7,500
Bank service charge 125
NSF check 2,000
Using the above information, determine the cash balance per books (before adjustments) for the Adler Company.
a. $4,625.
b. $27,500.
c. $14,625.
d. $20,000.
Solution: ($20,000 ? $15,000 + $7,500) ? $10,000 + $125 + 2,000 = $4,625
a. outstanding checks.
b. collection of a note by the bank.
c. NSF checks.
d. bank service charges.
a. $7,100.
b. $10,228.
c. $3,128.
d. $14,200.
Solution: ($37,000 + $50,632) ? ($33,872 + $43,532) = $10,228
a. $5,325.
b. $2,346.
c. $7,671.
d. $10,650.
Solution: ($27,750 + $37,974) ? ($25,404 + $32,649) = $7,671
a. Time lags.
b. Errors by the bank.
c. Errors by the company.
d. All of these answer choices are correct.
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.
a. Void the check. If it has not been cashed in 5 months, it will never be cashed.
b. Issue a replacement check because you assume the original check has been lost.
c. Wait 3 more months to give the bank more time to clear the check.
d. Investigate to determine why the check has not cleared.
a. NSF check.
b. Deposit in transit.
c. Bank error.
d. None of these items requires an adjusting entry.
Cash balance per bank $11,500
Outstanding checks $700
Deposits in transit $1,375
Credit memo for interest $25
Bank service charge $50
What is Kessler’s adjusted cash balance on April 30?
a. $12,150.
b. $12,200.
c. $10,825.
d. $12,175.
Solution: $11,500 ? $700 + $1,375 = $12,175
Cash balance per bank $7,200
Outstanding checks $560
Deposits in transit $1,100
Credit memo for interest $20
Bank service charge $40
What is Mendoza’s adjusted cash balance on April 30?
a. $7,720.
b. $7,760.
c. $6,660.
d. $7,740.
Solution: $7,200 ? $560 + $1,100 = $7,740
a. $1,906.
b. $346.
c. $916.
d. $2,970.
Solution: ($25,620 + $27,976) ? ($24,360 + $27,330) = $1,906
a. $2,540.
b. $460.
c. $1,220.
d. $3,960.
Solution: ($34,160 + $37,300) ? ($32,480 + $36,440) = $2,540
Balance per bank $11,460
Outstanding checks $2,325
Deposits in transit $3,750
NSF check $240
Bank service charge $75
Cash balance per books $13,200
As a result of this reconciliation, Russel will
a. reduce its cash account by $1,425.
b. reduce its cash account by $75.
c. increase its cash account by $165.
d. reduce its cash account by $315.
Solution: $240 + $75 = $315
Balance per bank $15,280
Outstanding checks $3,100
Deposits in transit $5,000
NSF check $320
Bank service charge $100
Cash balance per books $17,600
As a result of this reconciliation, Schwinn will
a. reduce its cash account by $1,900.
b. reduce its cash account by $100.
c. increase its cash account by $220.
d. reduce its cash account by $420.
Solution: $320 + $100 = $420
a. add $72 to the book’s balance.
b. subtract $72 from the book’s balance.
c. deduct $72 from the bank’s balance.
d. deduct $491 from the book’s balance.
a. added to the balance per books.
b. deducted from the balance per books.
c. added to the balance per bank.
d. deducted from the balance per bank.
a. $10,650.
b. $4,692.
c. $15,342.
d. $21,300.
Solution: $55,500 ? $50,808 = $4,692
a. $8,875.
b. $3,910.
c. $12,785.
d. $17,750.
Solution: ($46,250 + $63,290) ? ($42,340 + $54,415) = $12,785
a. The amount is offset against other current assets because users need to know net current assets.
b. The amount is shown as a current liability because a company cannot have a cash balance below zero.
c. The company must obtain a loan to bring the cash balance to zero before financial statements are prepared.
d. The negative cash balance is included as a current asset and discussed in a footnote to the financial statements.
a. Cash – regardless of whether it has a positive or negative balance.
b. Cash equivalents.
c. Cash that will be used to close a plant in eighteen months.
d. Restricted cash that will not be used within the upcoming year.
a. Money market fund.
b. Commercial paper.
c. Treasury bill.
d. Restricted cash.
a. money market accounts.
b. commercial paper.
c. U.S. Treasury bills.
d. long-term investment.
a. always as a noncurrent asset.
b. separately on the income statement.
c. separately on the balance sheet.
d. always as a current asset.
a. companies may have plenty of sales, but insufficient cash to support operations.
b. the cash to cash operating cycle for a manufacturer is generally shorter than that of a merchandising company.
c. manufacturers may experience a significant lag between the purchase of raw materials and the receipt of cash from customers.
d. companies should have sufficient cash to meet payments but minimize the amount of non-revenue-generating cash on hand.
a. Increasing the speed of receivables collection.
b. Planning the timing of major expenditures.
c. Keeping inventory levels low.
d. Delaying the payment of liabilities.
a. accountant.
b. president.
c. treasurer.
d. vice-president.
a. Increase the speed of collection on receivables.
b. Maintain idle cash.
c. Keep inventory levels low.
d. Delay payment of liabilities.
a. Increase collection of receivables.
b. Keep inventory levels high.
c. Delay payment of liabilities.
d. Invest idle cash.
a. Increase collection of receivables.
b. Keep inventory levels low.
c. Pay all liabilities early.
d. Invest idle cash.
a. Cash receipts.
b. Cash disbursements.
c. Cash sales.
d. Financing.
Beginning cash balance $100,000
Cash receipts 96,000
Cash disbursements 136,000
If the company has a policy of maintaining end of the month cash balance of $100,000, the amount the company would have to borrow is
a. $40,000.
b. $20,000.
c. $60,000.
d. $24,000.
Solution: $100,000 ? ($100,000 + $96,000 ? $136,000) = $40,000
Beginning cash balance $46,000
Cash receipts 62,000
Cash disbursements 78,000
If the company has a policy of maintaining end of the month cash balance of $40,000, the amount the company would have to borrow is
a. $24,000.
b. $10,000.
c. $16,000.
d. $0.
Solution: $40,000 ? ($46,000 + $62,000 ? $78,000) = $10,000
Beginning cash balance $90,000
Cash receipts 81,000
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. $87,000.
b. $21,000.
c. $6,000.
d. $0.
Solution: $75,000 ? ($90,000 + $81,000 ? $102,000) = $6,000
a. Cash receipts.
b. Financing needed.
c. Investing.
d. Cash disbursements.
Beginning cash balance $150,000
Cash receipts 145,000
Cash disbursements 170,000
If the company has a policy of maintaining end-of-the-month cash balance of $125,000, the amount the company would have to borrow is
a. $50,000.
b. $25,000.
c. $0
d. $75,000.
Beginning cash balance $96,000
Cash receipts 116,000
Cash disbursements 160,000
If the company has a policy of maintaining an end-of-the-month cash balance of $80,000, the amount the company would have to borrow is
a. $44,000.
b. $0.
c. $28,000.
d. $80,000.
Solution: $80,000 ? ($96,000 + $116,000 ? $160,000) = $28,000
January $255,000
February 375,000
March 525,000
April 450,000
The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is
a. $462,900.
b. $420,000.
c. $450,000.
d. $441,000.
Solution: ($255,000 ? .08) + ($375,000 ? .20) + ($525,000 ? .70) = $462,900
a. cash sales.
b. collections from customers.
c. receipts of interest and dividends.
d. expected borrowings.
a. Payments for materials.
b. Payments for income taxes.
c. Repayments of borrowed funds.
d. All of these answer choices are included.
February 150,000
March 210,000
April 180,000
The company’s past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of April is
a. $144,000.
b. $168,000.
c. $180,000.
d. $186,000.
Solution: ($210,000 ? .20) + ($180,000 ? .80) = $186,000
January $102,000
February 150,000
March 210,000
The company’s past experience indicates that 80% of the accounts receivable are collected in the month of sale, 20% in the month following the sale. The anticipated cash inflow for the month of March is
a. $198,000.
b. $168,000.
c. $210,000.
d. $204,000.
Solution: ($150,000 ? .20) + ($210,000 ? .80) = $198,000
a. make fewer purchases of inventory so they could control costs.
b. lay off workers for that period.
c. arrange to borrow the necessary cash for that period.
d. cut salaries for that period.
a. acquire financing of $800.
b. acquire financing of $6,320.
c. acquire financing of $4,720.
d. acquire financing of $18,480.
Solution: $24,000 ? ($23,200 + $111,800 ? $117,000) = $6,320
a. acquire financing of $600.
b. acquire financing of $4,740.
c. acquire financing of $3,540.
d. acquire financing of $13,860.
Solution: $18,000 ? ($17,400 + $83,850 ? $87,990) = $4,740
May $357,000
June 525,000
July 735,000
August 630,000
The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of August is
a. $648,060.
b. $588,000.
c. $630,000.
d. $617,400.
Solution: ($525,000 ? .08) + ($735,000 ? .20) + ($630,000 ? .70) = $630,000
April $ 200,000
May 120,000
June 300,000
The cash inflow in the month of June is expected to be
a. $226,000.
b. $171,000.
c. $180,000.
d. $216,000.
Solution: ($200,000 ? .05) + ($120,000 ? .30) + ($300,000 ? .60) = $226,000
July $240,000
August 144,000
September 360,000
The cash inflow in the month of September is expected to be
a. $271,200.
b. $205,200.
c. $216,000.
d. $259,200.
Solution: ($240,000 ? .05) + ($144,000 ? .30) + ($360,000 ? .60) = $271,200
a. Office salaries expense.
b. Interest expense.
c. Depreciation expense.
d. Travel expense.
a. $192,000.
b. $180,000.
c. $156,000.
d. $144,000.
Solution: ($140,000 ? .60) + ($180,000 ? .40) = $156,000
a. $720,000.
b. $675,000.
c. $585,000.
d. $540,000.
Solution: ($525,000 ? .60) + ($675,000 ? .40) = $585,000
a. an asset.
b. a liability.
c. a revenue.
d. an expense.
a. the petty cash custodian signs the voucher.
b. available supporting documents are attached to the voucher.
c. a journal entry is made for each cash distribution.
d. the individual receiving payment signs the voucher.
a. surprise counts by a supervisor.
b. cancellation of paid vouchers.
c. submission of supporting documents.
d. multiple petty cash custodians.
a. Segregation of duties.
b. Documentation procedures.
c. Independent internal verification.
d. Employee background check.
a. Petty Cash.
b. Cash.
c. Freight-In.
d. Postage Expense.
a. contra asset.
b. miscellaneous asset.
c. miscellaneous expense.
d. miscellaneous revenue.
a. Cash for $90.
b. Petty Cash for $90.
c. Cash Over and Short for $10.
d. Cash for $80.
Solution: $100 ? $10 = $90
a. debit to Cash for $160.
b. credit to Petty Cash for $163.
c. debit to Cash Over and Short for $3.
d. credit to Cash for $160.
Solution: $200 ? $37 ? $160 = $3
a. debit to Cash for $84.
b. credit to Petty Cash for $84.
c. credit to Cash Over and Short for $2.
d. credit to Cash for $86.
Solution: $86 ? ($100 ? $16) = $2
a. debit to Cash for $170.
b. credit to Petty Cash for $170.
c. debit to Petty Cash for $174.
d. credit to Cash for $174.
Solution: $200 ? $26 = $174
a. debit to Cash for $84.
b. credit to Petty Cash for $84.
c. credit to Cash Over and Short for $2.
d. credit to Cash for $86.
Solution: $100 ? $14 = $86
a. debit to Cash for $171.
b. credit to Petty Cash for $171.
c. credit to Cash over and Short for $3.
d. credit to Cash for $171.
Solution: $171 ? ($200 ? $32
a. credit Cash Over and Short for $4.
b. credit Miscellaneous Revenue for $4.
c. debit Cash Over and Short for $4.
d. debit Miscellaneous Expense for $4.
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.
a. establishing the fund.
b. making payments out of the fund.
c. recording shortages in the fund.
d. replenishing the fund.