ACC Test 2 Questions & Answers 2024/2025
A cash equivalent is a - ANSWERShighly liquid investment that has a maturity date no longer than three months from its original purchase date
Which procedure has the greatest chance of leading to errors or fraud?
a.
The company deposits checks an...
A cash equivalent is a - ANSWERShighly liquid investment that has a maturity date no longer than three
months from its original purchase date
Which procedure has the greatest chance of leading to errors or fraud?
a.
The company deposits checks and cash on hand into its bank account daily.
b.
The company permits the employees who collect cash from customers (ex. cashiers) to also record the
cash receipts into the accounting system.
c.
The company limits unauthorized access to its cash.
d.
The company verifies the bank deposit slips against the accounting records. - ANSWERSThe company
permits the employees who collect cash from customers (ex. cashiers) to also record the cash receipts
into the accounting system.
Which procedure has the greatest chance of leading to errors or fraud?
a.
The company requires all cash expenditures to be authorized before the cash disbursement.
b.
The company does not permit employees who are allowed to make cash disbursements to also be in
charge of cash receipts.
c.
The company rewards and encourages its employees not to take a yearly vacation.
, d.
The company makes sure its checks are numbered sequentially and uses them in sequential order. -
ANSWERSThe company rewards and encourages its employees not to take a yearly vacation.
How often should a company prepare a bank reconciliation? - ANSWERSMonthly
While preparing its bank reconciliation for August, a company notices the following:
The total amount of checks written that cleared the bank (and showed up on the bank statement) in
August was $7,000.
The total amount of checks written and credited to its Cash account in August was $9,000
.
Question: What is the amount of outstanding checks for August? - ANSWERS9000-7000=2000
2000
A company is showing an NSF check for $200 on the company side of its bank reconciliation.
Question: How should this NSF check be accounted for in the journal entry to adjust cash at the end of
the month? - ANSWERSAccounts receivable should be debited for $200.
Many general ledger accounts have supporting subsidiary ledgers.
As a general rule, which of the following statements is true for the subsidiary ledgers to the "Accounts
Receivable" account? - ANSWERSThe sum of the individual subsidiary ledgers should be equal to the
"Accounts Receivable" account balance.
The individual customer account balances which comprise the overall accounts receivable general ledger
balance are maintained in what is referred to as a subsidiary ledger. - ANSWERSTrue
What is commonly referred to as the "direct write-off method" for bad debts is an application of GAAP. -
ANSWERSFalse
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