Question 1

McDonald's Corporation is the largest food service organization in the world.The proper handling of cash and food is important to the profitability of McDonald's.Based on your personal knowledge of McDonald's and the internal control concepts and procedures described in the textbook,answer the following questions.
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Describe procedures that you believe McDonald's may use to control cash receipts.

Accepted Answer

Each cashier should start with his or he...

Question 2

Which of the following items is a reconciling item on the bank side of a bank reconciliation?

Accepted Answer

A)  Canceled checks
B)  Outstanding checks
C)  NSF checks
D)  Service chargeE) All of the above
F) C) and D)

Question 3

A check written by a company but not yet presented to the bank for payment is called a check in transit.

Accepted Answer

A) True 
 B)False

Question 4

A check written by a company but not yet presented to the bank for payment is called a(n)__________.

Accepted Answer

The answer of A check written by a company but...

Question 5

Deposits made by a company but not yet reflected on a bank statement are called

Accepted Answer

A)  debit memoranda.
B)  deposits in transit.
C)  credit memoranda.
D)  none of these are correct.E) A) and B)
F) C) and D)

Question 6

Which of the following is a sound internal control procedure for cash disbursements?

Accepted Answer

A)  Making copies of purchase orders for the receiving department so they know how many items to be expected upon delivery.
B)  Using presigned checks to facilitate payment within the cash discount period.
C)  Comparing purchase requisitions,purchase orders,receiving reports,and invoices.
D)  Requiring the signature of the purchasing department supervisor on checks.E) A) and B)
F) None of the above

Question 7

Delmont Corp.prepares monthly bank reconciliations of its checking account balance.The bank statement for May,2017,indicated the following:
?
 $$\begin{array} { l r } 
\text { Balance, May } 31,2017 & \$ 29,700 \
\text { Service charge for May } & 80 \
\text { Interest earned during May } & 120 \
\text { NSF check from Viacon Corp. (deposited by Delmont) } & 230 \
\text { Note } ( \$ 4,000 ) \text { and interest } ( \$ 100 ) \text { collected for Delmont from a } & \
\text { customer } & 4,100
\end{array}$$ An analysis of canceled checks and deposits and the records of Delmont Corp.revealed the following items:
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 $$\begin{array} { l r } 
\text { Checking account bal ance per Delmont's books } & \$ 26,040 \
\text { Outstanding checks as of May } 31 & 2,950 \
\text { Deposit in transit at May } 31 & 3,110 \
\text { Error in recording check \# } 4456 \text { issued by Delmont } & 90
\end{array}$$ The correct amount of check #4456 is $760,but it was recorded as a cash disbursement of $670 by mistake.The check was issued to pay for merchandise purchases.The check appeared on the bank statement correctly.
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Required
A)Prepare a bank reconciliation schedule at May 31,2017 in proper form.
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B)Explain how checking accounts,bank statements,and bank reconciliations are used by Delmont to control its cash.

Accepted Answer

A)
?
B)Checking accounts allow entities...

Question 8

Only one copy of the list of cash received should be prepared when an employee opens mail with customer payments to avoid complexity in the accounting system and maintain control.

Accepted Answer

A) True 
 B)False

Question 9

Accounting controls primarily concern safeguarding assets and ensuring the reliability of the financial statements.

Accepted Answer

A) True 
 B)False

Question 10

In a sound internal control system,all cash receipts should be deposited intact in the bank on a daily basis.

Accepted Answer

A) True 
 B)False

Question 11

On a bank reconciliation,interest earned for the month is added to the cash balance per the books.

Accepted Answer

A) True 
 B)False

Question 12

Section 404 of the Sarbanes-Oxley Act requires corporations to include an internal control report in their annual report.Describe,in general,the main elements that should be included in an internal control report.

Accepted Answer

In an internal control report,manageme...

Question 13

A(n)__________ is a form sent by the purchasing department to the supplier.

Accepted Answer

The answer of A(n)__________ is a form sent by the...

Question 14

Which of the following items would be subtracted from the balance per books on a bank reconciliation?

Accepted Answer

A)  Outstanding checks
B)  Deposit in transit
C)  Service charge assessed by the bank
D)  Interest collected by the bank on a customer noteE) None of the above
F) All of the above

Question 15

The use of customer statements as a control device will be effective only if the employees responsible for the custody of cash received through the mail,for record keeping,and for authorization of adjustments to customers' accounts are not allowed to prepare and mail statements to customers.

Accepted Answer

A) True 
 B)False

Question 16

An outstanding check is a check that

Accepted Answer

A)  has been presented to the bank for payment but has not been reported on the bank statement.
B)  has been written by the account holder but has not been presented to the bank for payment.
C)  is guaranteed for payment by the bank.
D)  has been written for an amount that is greater than the balance in the account holder's bank account.E) B) and C)
F) All of the above

Question 17

The IFRS definition of cash equivalents is very similar to that used by __________.

Accepted Answer

The answer of The IFRS definition of cash equivalents is...

Question 18

When preparing a bank reconciliation,outstanding checks are

Accepted Answer

A)  deducted from the bank statement balance.
B)  deducted from the company's book balance.
C)  added to the bank statement balance.
D)  added to the company's book balance.E) A) and B)
F) C) and D)

Question 19

Which internal control procedure is followed when the work of one department acts as a check on the work of another?

Accepted Answer

A)  Segregation of duties
B)  Safeguarding assets and records
C)  Independent verification
D)  Proper authorizationsE) A) and B)
F) A) and C)

Question 20

Which of the following assets is considered the most liquid?

Accepted Answer

A)  Cash
B)  Accounts receivable
C)  Merchandise inventory
D)  Prepaid expensesE) A) and B)
F) All of the above

Exam 6: Cash and Internal Control

In a sound internal control system,all cash receipts should be deposited intact in the bank on a daily basis.

Correct Answer
verified

A check written by a company but not yet presented to the bank for payment is called a(n)__________.

Correct Answer
verified

Which of the following is a sound internal control procedure for cash disbursements?

Correct Answer
verified

A check written by a company but not yet presented to the bank for payment is called a check in transit.

Correct Answer
verified

Which internal control procedure is followed when the work of one department acts as a check on the work of another?

Correct Answer
verified

Only one copy of the list of cash received should be prepared when an employee opens mail with customer payments to avoid complexity in the accounting system and maintain control.

Correct Answer
verified

The IFRS definition of cash equivalents is very similar to that used by __________.

Correct Answer
verified

Which of the following items would be subtracted from the balance per books on a bank reconciliation?

Correct Answer
verified

When preparing a bank reconciliation,outstanding checks are

Correct Answer
verified

Section 404 of the Sarbanes-Oxley Act requires corporations to include an internal control report in their annual report.Describe,in general,the main elements that should be included in an internal control report.

Correct Answer
verified

In an internal control report,manageme...
View Answer

Accounting controls primarily concern safeguarding assets and ensuring the reliability of the financial statements.

Correct Answer
verified

Correct Answer
verified
A)
?
B)Checking accounts allow entities...
View Answer

Correct Answer
verified
Each cashier should start with his or he...
View Answer

The use of customer statements as a control device will be effective only if the employees responsible for the custody of cash received through the mail,for record keeping,and for authorization of adjustments to customers' accounts are not allowed to prepare and mail statements to customers.

Correct Answer
verified

On a bank reconciliation,interest earned for the month is added to the cash balance per the books.

Correct Answer
verified

Deposits made by a company but not yet reflected on a bank statement are called

Correct Answer
verified

Which of the following items is a reconciling item on the bank side of a bank reconciliation?

Correct Answer
verified

An outstanding check is a check that

Correct Answer
verified

A(n)__________ is a form sent by the purchasing department to the supplier.

Correct Answer
verified

Which of the following assets is considered the most liquid?

Correct Answer
verified

Exam 6: Cash and Internal Control

In a sound internal control system,all cash receipts should be deposited intact in the bank on a daily basis.

Correct AnswerverifiedShow Answer

A check written by a company but not yet presented to the bank for payment is called a(n)__________.

Correct AnswerverifiedShow Answer

Which of the following is a sound internal control procedure for cash disbursements?

Correct AnswerverifiedShow Answer

A check written by a company but not yet presented to the bank for payment is called a check in transit.

Correct AnswerverifiedShow Answer

Which internal control procedure is followed when the work of one department acts as a check on the work of another?

Correct AnswerverifiedShow Answer

Only one copy of the list of cash received should be prepared when an employee opens mail with customer payments to avoid complexity in the accounting system and maintain control.

Correct AnswerverifiedShow Answer

The IFRS definition of cash equivalents is very similar to that used by __________.

Correct AnswerverifiedShow Answer

Which of the following items would be subtracted from the balance per books on a bank reconciliation?

Correct AnswerverifiedShow Answer

When preparing a bank reconciliation,outstanding checks are

Correct AnswerverifiedShow Answer

Section 404 of the Sarbanes-Oxley Act requires corporations to include an internal control report in their annual report.Describe,in general,the main elements that should be included in an internal control report.

Correct Answerverified​In an internal control report,manageme...View AnswerShow Answer

Accounting controls primarily concern safeguarding assets and ensuring the reliability of the financial statements.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA)? B)Checking accounts allow entities...View AnswerShow Answer

Correct AnswerverifiedEach cashier should start with his or he...View AnswerShow Answer

The use of customer statements as a control device will be effective only if the employees responsible for the custody of cash received through the mail,for record keeping,and for authorization of adjustments to customers' accounts are not allowed to prepare and mail statements to customers.

Correct AnswerverifiedShow Answer

On a bank reconciliation,interest earned for the month is added to the cash balance per the books.

Correct AnswerverifiedShow Answer

Deposits made by a company but not yet reflected on a bank statement are called

Correct AnswerverifiedShow Answer

Which of the following items is a reconciling item on the bank side of a bank reconciliation?

Correct AnswerverifiedShow Answer

An outstanding check is a check that

Correct AnswerverifiedShow Answer

A(n)__________ is a form sent by the purchasing department to the supplier.

Correct AnswerverifiedShow Answer

Which of the following assets is considered the most liquid?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

In an internal control report,manageme...
View Answer

Correct Answer
verified

Correct Answer
verified
A)
?
B)Checking accounts allow entities...
View Answer

Correct Answer
verified
Each cashier should start with his or he...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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