Balance Sheet and Points

Topics: Balance sheet, Depreciation, Generally Accepted Accounting Principles Pages: 12 (2520 words) Published: September 30, 2012
1. A NSF check should appear in which section of the bank reconciliation? (Points : 2)        Addition to the balance per books.
       Deduction from the balance per bank.
       Addition to the balance per bank.
       Deduction from the balance per books.|

2. A consequence of separation of duties is that (Points : 2)        theft by employees becomes impossible.
       operations become extremely inefficient because of constant training of employees.        more employees will need to be bonded.
       theft is still possible when several employees are involved.|

3. Which of the following is not included in the cash disbursements section of a cash budget? (Points : 2)        Payments for materials.
       Payments for income taxes.
       Repayments of borrowed funds.
       All of these are included.|

Cash equivalents are defined by IFRS as (Points : 2)
       cash on hand.
       demand deposits.
       cash on hand and demand deposits.
       short-term, highly liquid investments that are readily convertible into known amounts of cash.|

5. All of the following actions would strengthen internal control over a petty cash fund except (Points : 2)        surprise counts by a supervisor.
       cancellation of paid vouchers.
       submission of supporting documents.
       multiple petty cash custodians.|

6. Which of the following would be added to the balance per books on a bank reconciliation? (Points : 2)        Outstanding checks.
       Deposits in transit.
       Notes collected by the bank.
       NSF check.|

7. Which of the following is not a necessary internal control procedure for the replenishment of the petty cash fund? (Points : 2)        Segregation of duties.
       Documentation procedures.
       Independent internal verification.
       Employee background check.|

8. Collier Company has implemented a just-in-time system, which relies on suppliers to deliver goods for resale as needed. This implementation is most consistent with which of the following basic principles of cash management? (Points : 2)        Increasing the speed of receivables collection.        Planning the timing of major expenditures.

       Keeping inventory levels low.
       Delaying the payment of liabilities.|

9. Bonding involves all of the following except (Points : 2)        The company obtains insurance protection against misappropriation of assets by a dishonest employee.        The insurance company screens employees before they are added to the policy.        The company informs employees that the insurance company will vigorously prosecute all offenders.        Employees do not commit inappropriate acts because of the threat of prosecution and their loyalty to the employer.|

10. A bank statement (Points : 2)
       lets a depositor know the financial position of the bank as of a certain date.        is a credit reference letter written by the depositor's bank.        is a bill from the bank for services rendered.

       shows the activities that increased or decreased the depositor's account balance.|

11. Under the direct write-off method of accounting for uncollectible accounts (Points : 2)        the allowance account is increased for the actual amount of bad debt at the time of write-off.        a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.        balance sheet relationships are emphasized.

       bad debt expense is always recorded in the period in which the revenue was recorded.|

12. A company sells $800,000 of accounts receivable to a factor for cash less a 2% service charge. The entry to record the sale should not include a (Points : 2)        debit to Interest Expense for $16,000.

       debit to Cash for $784,000.
       debit to Service Charge Expense for $16,000.
       credit to Accounts Receivable for $800,000.|

13. A dishonored note receivable...
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