Accounting 201 Questions and Graded Answers.
The principles of internal control include _____. - establish responsibilities
An internal control system consists of the policies and procedures managers use to _____.
-ensure reliable accounting
-protect assets
-promote efficient operations
-uphold company policies
-all of the above - all of the above
An effective system of internal control _____. - helps protect company assets
The Sarbanes-Oxley Act _____. - requires managers of public companies to document
and assess the effectiveness of all internal control processes that impact financial reporting
Separation of duties _____. - divides responsibility for a transaction between two or more
individuals
The company's balance sheet on September 30, reflects cash and cash equivalents of _____. -
$109,500
Currency and coins on hand of $12,500 + Checking account balance of $35,000 + Customer
checks on hand (not yet deposited) of $2,000 + Money market fund balance of $50,000 +
Investment in 3-month U.S. Treasury bills of $10,000 = Total cash and cash equivalents of
$109,500. The investment in Microsoft common stock does not meet the criteria for a cash
equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a
known cash amount and sufficiently close to its due date so that its market value is not sensitive
to interest rate changes.
, Cash management principles include all of the following except _____. - maximize other
assets
At the end of business on September 1, the total displayed on the cash register tape shows $1,059
of cash sales for the day. However, when the clerk and the supervisor count the cash in the
register, the count reveals that $1,050 was actually collected from customers. Complete the
following journal entry by selecting the account names and dollar amounts from the drop-down
menus. - (D) Cash $1050
(D) Cash Over and Short $9
(C)Sales $1059
All of the following statements regarding a voucher system are incorrect except _____.
-all companies use the same standardized voucher system
-an invoice approval initiates the recording of a purchase
-for control purposes, department managers may place orders directly with suppliers in a well-
designed voucher system
-a voucher system is commonly used in small companies to compensate for the lack of other
internal controls
-a well-designed voucher system will prevent all errors and fraud - an invoice approval
initiates the recording of a purchase
On February 1, Derrick Company establishes a $200 petty cash fund. Complete the seller's
necessary journal entry by selecting the account names and dollar amounts from the drop-down
menus. - (D) Petty Cash $200
(C) Cash $200
Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15,
when the fund balance reached $7, the petty cash custodian prepared a petty cash report that
summarized receipts for postage ($140) and printing ($54). Complete the seller's necessary
journal entry by selecting the account names and dollar amounts from the drop-down menus. -
(D) Printing Expense $140
(D) Postage Expense $54
The principles of internal control include _____. - establish responsibilities
An internal control system consists of the policies and procedures managers use to _____.
-ensure reliable accounting
-protect assets
-promote efficient operations
-uphold company policies
-all of the above - all of the above
An effective system of internal control _____. - helps protect company assets
The Sarbanes-Oxley Act _____. - requires managers of public companies to document
and assess the effectiveness of all internal control processes that impact financial reporting
Separation of duties _____. - divides responsibility for a transaction between two or more
individuals
The company's balance sheet on September 30, reflects cash and cash equivalents of _____. -
$109,500
Currency and coins on hand of $12,500 + Checking account balance of $35,000 + Customer
checks on hand (not yet deposited) of $2,000 + Money market fund balance of $50,000 +
Investment in 3-month U.S. Treasury bills of $10,000 = Total cash and cash equivalents of
$109,500. The investment in Microsoft common stock does not meet the criteria for a cash
equivalent, which is a short-term, highly liquid investment asset that is readily convertible to a
known cash amount and sufficiently close to its due date so that its market value is not sensitive
to interest rate changes.
, Cash management principles include all of the following except _____. - maximize other
assets
At the end of business on September 1, the total displayed on the cash register tape shows $1,059
of cash sales for the day. However, when the clerk and the supervisor count the cash in the
register, the count reveals that $1,050 was actually collected from customers. Complete the
following journal entry by selecting the account names and dollar amounts from the drop-down
menus. - (D) Cash $1050
(D) Cash Over and Short $9
(C)Sales $1059
All of the following statements regarding a voucher system are incorrect except _____.
-all companies use the same standardized voucher system
-an invoice approval initiates the recording of a purchase
-for control purposes, department managers may place orders directly with suppliers in a well-
designed voucher system
-a voucher system is commonly used in small companies to compensate for the lack of other
internal controls
-a well-designed voucher system will prevent all errors and fraud - an invoice approval
initiates the recording of a purchase
On February 1, Derrick Company establishes a $200 petty cash fund. Complete the seller's
necessary journal entry by selecting the account names and dollar amounts from the drop-down
menus. - (D) Petty Cash $200
(C) Cash $200
Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15,
when the fund balance reached $7, the petty cash custodian prepared a petty cash report that
summarized receipts for postage ($140) and printing ($54). Complete the seller's necessary
journal entry by selecting the account names and dollar amounts from the drop-down menus. -
(D) Printing Expense $140
(D) Postage Expense $54
