Question 1

A cheque:

Accepted Answer

A)   Involves the writer,the signers,the casher,and the bank.
B)   Involves the maker,the payee,and the bank.
C)   Involves the maker and the payee.
D)   Involves the bookkeeper,the payee,and the bank.
E)   Involves the signer,the casher,and the company.F) All of the above
G) A) and E)

Question 2

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

Accepted Answer

A) True 
 B)False

Question 3

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Accepted Answer

A) True 
 B)False

Question 4

The use of internal controls provides guaranteed protection against losses due to operating activities.

Accepted Answer

A) True 
 B)False

Question 5

Risks involved in e-commerce include:

Accepted Answer

A)   Firewalls.
B)   Encryption.
C)   Missing documents.
D)   Computer viruses.
E)   All of these answers are correct.F) B) and E)
G) All of the above

Question 6

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

Accepted Answer

A) True 
 B)False

Question 7

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Accepted Answer

A) True 
 B)False

Question 8

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

Accepted Answer

A) True 
 B)False

Question 9

EFT is the use of electronic communication to transfer cash from one party to another.

Accepted Answer

A) True 
 B)False

Question 10

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Accepted Answer

A) True 
 B)False

Question 11

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT a principle of internal control?

Accepted Answer

A)   Responsibilities should be clearly established.
B)   Adequate records should be maintained.
C)   Responsibility for related transactions should be divided.
D)   Assets should be insured and employees bonded.
E)   Audits should always be conducted by employees internal to the organization.F) B) and D)
G) D) and E)

Question 13

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Accepted Answer

A)   A discount from revenue used in determining net sales.
B)   A selling expense.
C)   An administrative expense
D)   All of these answers are correct.
E)   None of these answers is correct.F) A) and B)
G) None of the above

Question 14

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Accepted Answer

A) True 
 B)False

Question 15

Quick assets include cash,inventory,and receivables.

Accepted Answer

A) True 
 B)False

Question 16

The acid-test ratio:

Accepted Answer

A)   Is also called the quick ratio.
B)   Measures profitability.
C)   Measures liquidity.
D)   Is also called the quick ratio and measures liquidity.
E)   All of these answers are correct.F) A) and D)
G) B) and D)

Question 17

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

Accepted Answer

A) True 
 B)False

Question 18

Explain the difference between cash and cash equivalents.

Accepted Answer

Cash consists of cash on hand and demand...

Question 19

What is the main motivation for retailers to accept credit cards or debit cards?

Accepted Answer

The retailer hopes to increase...

Exam 8: Internal Control and Cash

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Correct Answer
verified

The use of internal controls provides guaranteed protection against losses due to operating activities.

Correct Answer
verified

Risks involved in e-commerce include:

Correct Answer
verified

Quick assets include cash,inventory,and receivables.

Correct Answer
verified

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Correct Answer
verified

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

Correct Answer
verified

EFT is the use of electronic communication to transfer cash from one party to another.

Correct Answer
verified

Which of the following is NOT a principle of internal control?

Correct Answer
verified

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

Correct Answer
verified

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Correct Answer
verified

What is the main motivation for retailers to accept credit cards or debit cards?

Correct Answer
verified
The retailer hopes to increase...
View Answer

Explain the difference between cash and cash equivalents.

Correct Answer
verified
Cash consists of cash on hand and demand...
View Answer

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Correct Answer
verified

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Correct Answer
verified

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

Correct Answer
verified

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

Correct Answer
verified

A cheque:

Correct Answer
verified

The acid-test ratio:

Correct Answer
verified

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

Correct Answer
verified

Exam 8: Internal Control and Cash

Internal control over cash receipts ensures that all cash received is properly recorded and deposited.

Correct AnswerverifiedShow Answer

The use of internal controls provides guaranteed protection against losses due to operating activities.

Correct AnswerverifiedShow Answer

Risks involved in e-commerce include:

Correct AnswerverifiedShow Answer

Quick assets include cash,inventory,and receivables.

Correct AnswerverifiedShow Answer

Factors that cause the bank statement balance of a chequing account to be different from the business chequing account balance include: outstanding cheques,deposits in transit,deductions for bank fees,additions for interest,and errors.

Correct AnswerverifiedShow Answer

The principles of internal control include: ensure transactions and activities are authorized,maintain records,insure assets,separate recordkeeping and custody of assets,and perform internal and external audits.

Correct AnswerverifiedShow Answer

EFT is the use of electronic communication to transfer cash from one party to another.

Correct AnswerverifiedShow Answer

Which of the following is NOT a principle of internal control?

Correct AnswerverifiedShow Answer

The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding cheques,deposits,and bank service charges to the bank balance.

Correct AnswerverifiedShow Answer

The fees charged businesses by banks on credit card transactions can be shown on the income statement as:

Correct AnswerverifiedShow Answer

What is the main motivation for retailers to accept credit cards or debit cards?

Correct AnswerverifiedThe retailer hopes to increase...View AnswerShow Answer

Explain the difference between cash and cash equivalents.

Correct AnswerverifiedCash consists of cash on hand and demand...View AnswerShow Answer

Credit cards do not remove the risk of bad debts to the business accepting payment by credit card.

Correct AnswerverifiedShow Answer

Cash consists of cash on hand and demand deposits.This includes coins,currency,and amounts on deposits in bank accounts,chequing accounts and some savings accounts.

Correct AnswerverifiedShow Answer

An error made by the bank should result in a reconciling item on the book side of a bank reconciliation.

Correct AnswerverifiedShow Answer

Basic services provided by banks such as bank accounts,deposit slips and cheques contribute to the control and safeguarding of cash.

Correct AnswerverifiedShow Answer

A cheque:

Correct AnswerverifiedShow Answer

The acid-test ratio:

Correct AnswerverifiedShow Answer

Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The retailer hopes to increase...
View Answer

Correct Answer
verified
Cash consists of cash on hand and demand...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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