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Chapter9ResultsforMultipleChoiceQuiz

ResultsforMultipleChoiceQuiz
Closethiswindow

Youcorrectlyanswered4questionsforascoreof26percent.
91.Whichofthefollowingisnotabroadprincipleofinternalcontrol?
26%

a.Responsibilitiesshouldbeclearlyestablished
b.Adequaterecordsshouldbemaintained
c.Assetsshouldbeinsuredandemployeesbonded
d.Recordkeepingandcustodyshouldbecombined
Thecorrectansweris"d".Yourchoiceof"c"wasincorrect.
Recordkeepingandcustodyshouldbeseparated,sothattherecord
keepersdonothaveaccesstotheassets.
92.Whichofthefollowingisnotabroadprincipleofinternalcontrol?
a.Responsibilitiesshouldbeclearlyestablished
b.Adequaterecordsshouldbemaintained
c.Regularanddependentreviews
d.Responsibilityforrelatedtransactionsshouldbedivided
Youansweredcorrectly!Internalcontrolproceduresshould
includeregularandindependentreviews.Independentreviewsare
performedbyexternalauditors(CAs)whoaudittheaccounting
systemandfinancialstatements.
93.Thepropertreatmentofoutstandingchequesonabankreconciliationisto
showthemasa(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Thecorrectansweris"d".Yourchoiceof"b"wasincorrect.
Theoutstandingchequeshavebeenrecordedbythedepositorbut
notbythebankthereforethebankbalancewilldecreasebythe
amountoftheoutstandingcheques,oncetheyclear(arepaidby)
thebank.
94.Thepropertreatmentofunrecordeddeposits(depositsintransit)ona
bankreconciliationistoshowthemasa(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance

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Thecorrectansweris"c".Yourchoiceof"b"wasincorrect.
Theunrecordeddepositshavebeenrecordedbythedepositorbut
notbythebankthereforethebankbalancewillincreasebythe
amountoftheunrecordeddeposits,oncetheyarerecordedbythe
bank.
95.Thepropertreatmentonthebankreconciliationofadebitmemorandum
issuedbythebankistoshowitasa(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Thecorrectansweris"b".Yourchoiceof"c"wasincorrect.A
debitmemorandumisissuedbyabankwhenitreducesa
depositor'sbankaccountforservicesorotheritems.Sincetheitem
hasbeenrecordedbythebankbutnotbythedepositor,itis
deductedfromthebookbalance.
96.Thepropertreatmentonthebankreconciliationofanotecollectedbythe
bankforthedepositoristoshowitasa(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Thecorrectansweris"a".Yourchoiceof"c"wasincorrect.
Thecollectionofanotewouldbeevidencedbyabankcredit
memorandum.Sincethenotewasrecordedbythebankbutnotby
thedepositor,theamountofthenoteandanyinterestshouldbe
addedtothebookbalance.
97.ThepropertreatmentonthebankreconciliationofanNSFchequeofa
customerthatisreturnedwiththebankstatementistoshowitasa(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Youansweredcorrectly!AnNSFchequereducesthedepositor's
chequingaccount.Havingbeenrecordedbythebankbutnotbythe
depositor,itmustbedeductedfromthechequingaccountanda
receivableestablishedforthemakerofthecheque.
98.WhichofthefollowingwouldrequirethePettyCashaccounttobe
credited?
a.thepettycashfundisshortby$3.50
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b.thepettycashfundisoverby$4.50
c.thepettycashaccountisbeingincreased
d.thepettycashaccountisbeingdecreased
Thecorrectansweris"d".Yourchoiceof"b"wasincorrect.
ThePettyCashaccountisdebitedwhenapettycashfundis
establishedorwhenitisincreased.ThePettyCashaccountis
creditedtoeliminatethepettycashfundortodecreaseitsbalance.
99.Ifthepettycashfundisnotreplenishedattheendoftheaccounting
reportingperiod,
a.theincomestatementandthebalancesheetwillnotbe
correct
b.liabilitieswillbeoverstatedonthebalancesheet
c.thecashaccountwillbeunderstated
d.itindicatesthatthepettycashfundisprobablyshort
Thecorrectansweris"a".Yourchoiceof"c"wasincorrect.
Expenseswillbeunderstatedbytheamountofanyexpensespaid
frompettycash.Inaddition,thePettyCashaccountbalanceshown
onthebalancesheetwillnotbeequaltotheactualpettycashon
hand.
910.Thebookkeeperrecordedabankdepositat$450,butthebankrecorded
thedepositatitscorrectamountof$540.Thebankreconciliationwillrequire
a(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Thecorrectansweris"a".Yourchoiceof"b"wasincorrect.A
bookkeepingerrorbythedepositorrequiresacorrectingentry.In
thiscase,thedepositorhas$90morethanoriginallyrecorded
therefore,thecorrectingentrywouldincludeadebittoCashfor
$90.00.
911.Thebookkeeperrecordedachequeat$340.56forstoresupplies.The
chequewasrecordedbythebankatitscorrectamountof$430.65.Thebank
reconciliationwillrequirea(an)
a.additionperbookbalanceofcash
b.deductionperbookbalanceofcash
c.additionperbankstatementbalance
d.deductionperbankstatementbalance
Youansweredcorrectly!Abookkeepingerrorbythedepositor
requiresacorrectingentrybemade.Inthiscase,thedepositorhas
$90.09lessthanoriginallyrecordedtherefore,thecorrectingentry
wouldrequireacredittoCashfor$90.09.
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912.Attheendoftheday,thecashier:(1)countsthemoneyinthecash
drawer,(2)comparesthecashcountwiththerecordedsalesfortheday,and
(3)makesnotationsofdifferencesonaspecialreportthatisforwarded,along
withthecash,totheaccountingdepartment.Thisprocedureis
a.acceptablepractice,adheringtointernalcontrolprinciples
b.designedtoprovideadequateinternalcontrolovercash
c.unacceptablepractice,notfollowinginternalcontrol
principles
d.followsthebroadprincipleofinternalcontrolofinsuringassets
Thecorrectansweris"c".Yourchoiceof"b"wasincorrect.
Theprocedureviolatesthebroadprinciplesofinternalcontrolof
separatingrecordkeepingandassetcustody,andofdividing
responsibilityforrelatedtransactions.
913.Management'sabilitytomonitorandcontrolbusinessoperationsis
greatlyimprovedwithacomputerizedaccountingsystembecause
a.computersprovidemorerapidaccesstolargequantitiesof
information
b.morehardevidenceintheformofwrittenformsanddocuments
areused
c.separationofdutiesdoesnothavetobemaintained
d.dataentryerrorsarealwaysdiscoveredintheearlystages
Thecorrectansweris"a".Yourchoiceof"c"wasincorrect.
Oncedatahasbeenenteredcorrectly,computerscanbeusedto
providethatdataquickly,andinmanydifferentformats,to
managerstohelpthemmakeinformeddecisions.
914.Toestablishapettycashfundforadepartmentrequiresajournalentry
thatwill
a.debitCashandcreditPettyCash
b.debitPettyCashandcreditCash
c.debitMiscellaneousExpenseandcreditCash
d.debitAccountsReceivableandcreditPettyCash
Youansweredcorrectly!Thejournalentryrequiresadebitto
PettyCashandacredittoCash
915.Whichofthefollowingisnotoneoftheprinciplesofinternalcontrol.
a.Maintainadequaterecords
b.Separaterecordkeepingfromcustodyofassets
c.Applytechnologicalcontrols
d.Makecashdepositsatleasteveryotherday
Thecorrectansweris"d".Yourchoiceof"b"wasincorrect.
Cashdepositsshouldbemadeatleastonceadayandmoreoftenif
alargeamountofcashistakenineachday.
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Chapter9ResultsforMultipleChoiceQuiz

Closethiswindow

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'Email'button.
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