MGMT 200 CHAPTER 4 EXAM
QUESTIONS AND CORRECT
ANSWERS
A bank statement may not agree with the amount of cash recorded by the company in
the cash account because of _____ differences and errors. - Answer-timing
One of the most important internal controls for cash is the bank _____. - Answer-
reconciliation
What is the primary purpose of a bank reconciliation? - Answer-To ensure the bank
balance per reconciliation is equal to the company balance per reconciliation
What would cause a bank statement not to agree with the cash balance in the
accounting records? - Answer-Deposits outstanding that have been recorded on the
company's records, but not on the bank's.
The bank paid interest that the company has not recorded.
The bank made an error in recording a deposit made by the company.
The company made an error in recording a deposit.
Which of the following is an internal control procedure for cash disbursements? -
Answer-Disbursements should be made by check, debit, or credit card.
Preparation of a bank _____ helps maintain control of cash accounts. - Answer-
reconciliation
A bank reconciliation reconciles the bank statement with the company's - Answer-cash
account in the balance sheet.
Which of the following will cause differences between the bank statement balance and
the accounting balance for cash? - Answer-Errors
Timing differences
If a company records a transaction before the bank records the same transaction, this is
called a/an ______ difference. - Answer-timing
An intentional error by an employee that results in theft is referred to as a ______. -
Answer-fraud
, The bank will show a customer's deposit on bank statements as a _____. - Answer-
credit, because a deposit is a liability from the bank's point of view
Differences between the bank statement balance and the cash account balance in the
accounting records are primarily caused by timing differences and - Answer-errors
Which of the following steps are necessary to reconcile the bank balance and the cash
account balance. - Answer-Record items that reconcile the company's cash balance
Adjust bank's cash balance for items not in bank statement
Adjust the company's cash balance for items not in company records
A(n) _____ difference in cash occurs when a company records a transaction either
before or after the bank records the same transaction. - Answer-timing
When adjusting the bank balance in a bank reconciliation, which item must be
subtracted from the bank balance? - Answer-Outstanding checks
Which of the following are errors in accounting for cash? - Answer-Recording a cash
collection of $4,000 but depositing $3,000 into the bank.
Recording a check for $168 for $186 in the cash account.
The bank processing a check for $210 as $120.
The bank will show a customer's withdrawal as a _____. - Answer-debit, because a
withdrawal decreases its liability from the bank's point of view
When adjusting the bank balance in a bank reconciliation, which item must be added to
the bank balance? - Answer-Deposits outstanding
The use of one's occupation for personal enrichment through the deliberate misuse or
misapplication of the employer's resources is called occupational - Answer-fraud
The Sarbanes-Oxley Act applies to - Answer-companies that are required to file with the
SEC.
Internal control consists of plans to (Select all that apply.) - Answer-provide accurate
and reliable accounting information.
safeguard company assets.
Strong internal control systems allow greater reliance by investors on: - Answer-
reported financial statements
The framework for designing an internal control system is provided by the - Answer-
Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
When a person intentionally deceives another person or company for personal gain, this
is referred to as _____. - Answer-fraud
QUESTIONS AND CORRECT
ANSWERS
A bank statement may not agree with the amount of cash recorded by the company in
the cash account because of _____ differences and errors. - Answer-timing
One of the most important internal controls for cash is the bank _____. - Answer-
reconciliation
What is the primary purpose of a bank reconciliation? - Answer-To ensure the bank
balance per reconciliation is equal to the company balance per reconciliation
What would cause a bank statement not to agree with the cash balance in the
accounting records? - Answer-Deposits outstanding that have been recorded on the
company's records, but not on the bank's.
The bank paid interest that the company has not recorded.
The bank made an error in recording a deposit made by the company.
The company made an error in recording a deposit.
Which of the following is an internal control procedure for cash disbursements? -
Answer-Disbursements should be made by check, debit, or credit card.
Preparation of a bank _____ helps maintain control of cash accounts. - Answer-
reconciliation
A bank reconciliation reconciles the bank statement with the company's - Answer-cash
account in the balance sheet.
Which of the following will cause differences between the bank statement balance and
the accounting balance for cash? - Answer-Errors
Timing differences
If a company records a transaction before the bank records the same transaction, this is
called a/an ______ difference. - Answer-timing
An intentional error by an employee that results in theft is referred to as a ______. -
Answer-fraud
, The bank will show a customer's deposit on bank statements as a _____. - Answer-
credit, because a deposit is a liability from the bank's point of view
Differences between the bank statement balance and the cash account balance in the
accounting records are primarily caused by timing differences and - Answer-errors
Which of the following steps are necessary to reconcile the bank balance and the cash
account balance. - Answer-Record items that reconcile the company's cash balance
Adjust bank's cash balance for items not in bank statement
Adjust the company's cash balance for items not in company records
A(n) _____ difference in cash occurs when a company records a transaction either
before or after the bank records the same transaction. - Answer-timing
When adjusting the bank balance in a bank reconciliation, which item must be
subtracted from the bank balance? - Answer-Outstanding checks
Which of the following are errors in accounting for cash? - Answer-Recording a cash
collection of $4,000 but depositing $3,000 into the bank.
Recording a check for $168 for $186 in the cash account.
The bank processing a check for $210 as $120.
The bank will show a customer's withdrawal as a _____. - Answer-debit, because a
withdrawal decreases its liability from the bank's point of view
When adjusting the bank balance in a bank reconciliation, which item must be added to
the bank balance? - Answer-Deposits outstanding
The use of one's occupation for personal enrichment through the deliberate misuse or
misapplication of the employer's resources is called occupational - Answer-fraud
The Sarbanes-Oxley Act applies to - Answer-companies that are required to file with the
SEC.
Internal control consists of plans to (Select all that apply.) - Answer-provide accurate
and reliable accounting information.
safeguard company assets.
Strong internal control systems allow greater reliance by investors on: - Answer-
reported financial statements
The framework for designing an internal control system is provided by the - Answer-
Committee of Sponsoring Organizations (COSO) of the Treadway Commission.
When a person intentionally deceives another person or company for personal gain, this
is referred to as _____. - Answer-fraud
