Accounting 201 Exam Questions
and Answers
When the company's bank reconciliation was prepared, one of the adjustments to the
balance per books included an NSF check in the amount of $75 (that was received from
a customer in payment of her account). The journal entry to record this item includes a
_____. - Answer-debit to Accounts Receivable in the amount of $75
The company's days' sales uncollected is closest to _____. - Answer-53.7 days
Days' sales uncollected = Ending Accounts Receivable of $125,000 / Net Sales of
$850,000 x 365 = 53.7 days
A good system of internal control for cash provides adequate procedures for protecting
both cash receipts and cash disbursements. Identify which one of following statements
is true regarding this protection.
A basic guideline for safeguarding cash is to separate the duties of those who have
custody of cash from those who keep cash records.
A voucher system of control is a control system exclusively for cash receipts.
A petty cash system is not a control procedure for safeguarding cash.
A basic guideline for safeguarding cash is that all cash receipts be deposited weekly or
monthly. - Answer-A basic guideline for safeguarding cash is to separate the duties of
those who have custody of cash from those who keep cash records.
The _____ Category includes currency and coins along with amounts on deposit in
bank accounts, checking accounts, and savings accounts. - Answer-Cash
The term _________ refers to a company's ability to pay for its near-term obligations. -
Answer-Liquidity
The ________ Category includes short-term, highly liquid investment assets that are
readily convertible to a known cash amount and sufficiently close to their due dates so
that their market value is not sensitive to interest rate changes. - Answer-cash
equivalents
The principles of internal control include _____. - Answer-establish responsibilities
An internal control system consists of the policies and procedures managers use to
_____.
-ensure reliable accounting
and Answers
When the company's bank reconciliation was prepared, one of the adjustments to the
balance per books included an NSF check in the amount of $75 (that was received from
a customer in payment of her account). The journal entry to record this item includes a
_____. - Answer-debit to Accounts Receivable in the amount of $75
The company's days' sales uncollected is closest to _____. - Answer-53.7 days
Days' sales uncollected = Ending Accounts Receivable of $125,000 / Net Sales of
$850,000 x 365 = 53.7 days
A good system of internal control for cash provides adequate procedures for protecting
both cash receipts and cash disbursements. Identify which one of following statements
is true regarding this protection.
A basic guideline for safeguarding cash is to separate the duties of those who have
custody of cash from those who keep cash records.
A voucher system of control is a control system exclusively for cash receipts.
A petty cash system is not a control procedure for safeguarding cash.
A basic guideline for safeguarding cash is that all cash receipts be deposited weekly or
monthly. - Answer-A basic guideline for safeguarding cash is to separate the duties of
those who have custody of cash from those who keep cash records.
The _____ Category includes currency and coins along with amounts on deposit in
bank accounts, checking accounts, and savings accounts. - Answer-Cash
The term _________ refers to a company's ability to pay for its near-term obligations. -
Answer-Liquidity
The ________ Category includes short-term, highly liquid investment assets that are
readily convertible to a known cash amount and sufficiently close to their due dates so
that their market value is not sensitive to interest rate changes. - Answer-cash
equivalents
The principles of internal control include _____. - Answer-establish responsibilities
An internal control system consists of the policies and procedures managers use to
_____.
-ensure reliable accounting
