Quiz Answers - AC 116 MIDTERM QUESTIONS AND ANSWERS Chapter...

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AC 116 MIDTERM QUESTIONS AND ANSWERS Chapter 8 1. A necessary element of internal control is a. database b. systems design c. systems analysis d. information and communication ANS: D 2. An example of a preventive control is a. the use of a bank account b. separation of the Purchasing Department and Accounting Department personnel c. bonding employees who handle cash d. accepting payment in currency only ANS: B 3. Under the voucher system, every transaction is recorded at the time of a. requisitioning b. ordering c. incurring d. paying ANS: C 4. A debit or credit memorandum describing entries in the depositor's bank account may be enclosed with the bank statement. An example of a credit memorandum is a. deposited checks returned for insufficient funds b. a promissory note left for collection c. a service charge d. notification that a customer's check for $375 was recorded by the depositor as $735 on the deposit ticket ANS: B 5. Journal entries based on the bank reconciliation are required in the depositor's accounts for a. outstanding checks b. deposits in transit c. bank errors d. book errors ANS: D
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6. Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer. What entry is required in the depositor's accounts? a. debit Notes Receivable; credit Cash b. debit Cash; credit Miscellaneous Income c. debit Cash; credit Notes Receivable d. debit Accounts Receivable; credit Cash ANS: C 7. Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. What entry is required in the depositor's accounts? a. debit Other Income; credit Cash b. debit Cash; credit Other Income c. debit Cash; credit Accounts Receivable d. debit Accounts Receivable; credit Cash ANS: D 8. Which of the following would be subtracted from the balance per bank on a bank reconciliation? a. Outstanding checks b. Deposits in transit c. Notes collected by the bank d. Service charges ANS: A 9. Marcus Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30 $11,000 Note receivable collected by bank 6,000 Outstanding checks 9,000 Deposits-in-transit 4,500 Bank service charge 75 NSF 1,200 Using the above information, determine the cash balance per books (before adjustments) for the Marcus Company. a. $9,775 b. $15,725 c. $15,500 d. $1,775 ANS: D
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10. A $100 petty cash fund contains $92 in petty cash receipts, and $6.50 in currency and coins. The journal entry to record the replenishment of the fund would include a a. credit to Petty Cash for $93.50 b. credit to Cash for $92 c. debit to Cash Short and Over for $1.50 d. credit to Cash Short and Over for $1.50 ANS: C 11. In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $450 is “NSF”. The bank also informs you that due to the amount of activity on your business account the
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This note was uploaded on 06/28/2010 for the course ACCT 116 taught by Professor Atill during the Spring '10 term at Kansas City Kansas Community College.

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Quiz Answers - AC 116 MIDTERM QUESTIONS AND ANSWERS Chapter...

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