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Financial Accounting (Exam 2 chapter 5-9) (1)
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Financial Accounting (Exam 2 chapter5-9)
When the cash count sheets for the day equal $14,140 and the cash register reports
$14,280, the journal entry to record the sales will include a: - CORRECT
ANSWER-debit to Cash Shortage
Employee fraud includes which of the following categories? - CORRECT
ANSWER-Corruption
On June 4, Marie Company had cash sales rung up by cashiers totaling $163,800.
Cash in the drawer was counted and found to be $165,000. The journal entry to
record the sales for June 4, would include a: - CORRECT ANSWER-credit to Cash
Overage for $1,200.
Egrane, Incorporated's monthly bank statement showed the ending balance of cash
of $14,800. The bank reconciliation for the period showed an adjustment for a
deposit in transit of $1,200, outstanding checks of $1,600, an NSF check of $560,
bank service charges of $24 and the EFT from a customer in payment of the
customer's account of $1,200.
What is the up-to-date ending Cash balance? - CORRECT ANSWER-$14,400
Comparing the cash in the register with the cash count sheet is required by the
internal control principle of: - CORRECT ANSWER-independently verifying.
McKeel Publishing had outstanding checks totaling $7,560 on its June bank
reconciliation. In July, McKeel issued checks totaling $54,460. The July bank
statement shows that $36,820 in checks cleared the bank in July. The amount of
outstanding checks on McKeel's July bank reconciliation should be: - CORRECT
ANSWER-$25,200.
Explanation:
Remaining outstanding checks = Outstanding checks + Additional checks issued −
Checks cleared= $7,560 + $54,460 − $36,820 = $25,200
An example of the internal control principle of establishing responsibility is: -
CORRECT ANSWER-assigning each cash drawer to only one employee
establishing responsibility.
Explanation:
, Whenever possible, establish responsibility by assigning each task to only one
employee. Doing so will allow you to determine who caused any errors or thefts that
occur. That's why retail companies assign a separate cash register drawer to each
employee at the beginning of a shift. If two cashiers were to use the same drawer, it
would be impossible to know which cashier caused the drawer to be short on cash.
With only one person responsible for adding and removing money from the drawer,
there's no doubt about who is responsible for a cash shortage.
Which of the following is not one of the control components that are part of the
framework used when analyzing an internal control system? - CORRECT
ANSWER-independent verifications
Explanation:
Most organizations use the following control components as a framework when
analyzing their internal control systems: control environment, risk assessment,
control activities, information and communication, and monitoring activities.
Which of the following would be considered inventory? - CORRECT
ANSWER-Goods held for sale in the normal course of business.
Eugene Company has inventory it purchased for $6,000. It sells the inventory to a
customer for $10,000, including installation. Installation sold separately costs $1,000
and the inventory sold separately costs $10,000. What amount of Sales Revenue is
recognized by Eugene when delivery of the inventory has been made to the
customer, but the installation has not been completed? - CORRECT
ANSWER-$9,091
If merchandise purchased on credit is returned to the seller for a full refund, what
would be the effect on the accounts listed below? - CORRECT ANSWER-Decrease
Inventory; No effect on Cost of Goods Sold; Decrease Accounts Payable.
Seasons has sales of $61,000, beginning inventory of $8,000, purchases of $36,000,
and ending inventory of $3,500. The cost of goods sold is: - CORRECT
ANSWER-$40,500.
A company buys footwear and clothing from manufacturers, which it resells to
discount stores in a large urban area. This company is an example of a: - CORRECT
ANSWER-wholesale merchandising company.
Sales Revenue reports the: - CORRECT ANSWER-selling price times the quantity of
goods sold.
Intel makes microchips from raw materials acquired from suppliers. Intel is a: -
CORRECT ANSWER-manufacturer.
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