Question 1

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Bank charges

Accepted Answer

Bank charges need to be adjusted in the company's books because they are often first noted on the bank statement and then need to be recorded by the company to reflect the decrease in its cash balance.

Question 2

deposit in transit

Accepted Answer

Deposits in transit are amounts that have been recorded by the company but not yet reflected on the bank statement. Therefore, they are added to the bank statement balance during the bank reconciliation process to reconcile the company's book balance with the bank statement balance.

Question 3

Match the following elements of internal control:
-information and communication

Accepted Answer

Information and communication are used by management for guiding operations and ensuring compliance with requirements. This element of internal control ensures that all relevant information is identified, captured, and communicated in a form and timeframe that enable people to carry out their responsibilities.

Question 4

charges for some other company's safe deposit box were posted to your account

Accepted Answer

The answer of charges for some other company's safe deposit...

Question 5

a $1,000 note from one of your customers was collected by the bank

Accepted Answer

The $1,000 note collected by the bank should be added to the company's books because it represents an increase in the company's cash balance that has not yet been recorded in the company's accounting records.

Question 6

List the objectives of internal control and give an example of how each is implemented.

Accepted Answer

The answer of List the objectives of internal control and...

Question 7

Match each item to a bank statement adjustment, a company books adjustment, or either.
-NSF check

Accepted Answer

An NSF (Non-Sufficient Funds) check is an adjustment on the company's books because the company must account for the check that was not honored due to insufficient funds in the payer's account.

Question 8

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Outstanding checks

Accepted Answer

Outstanding checks are adjustments made on the bank statement to reflect checks that were written but have not yet cleared the bank. This is only a bank statement adjustment and not a company book adjustment.

Question 9

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Note collected by the bank

Accepted Answer

A note collected by the bank on behalf of the company is an item that the company needs to adjust in its books. The bank has already processed this transaction, but the company needs to update its records to reflect the collection.

Question 10

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Error in recording a check

Accepted Answer

An error in recording a check would require an adjustment to the company's books to correct the mistake, as the error originated from the company's side, not the bank's.

Question 11

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Interest revenue

Accepted Answer

Interest revenue is typically recorded as an adjustment in the company's books when the company receives interest from the bank, as the bank statement will reflect the interest earned but the company's records need to be updated to reflect this income.

Question 12

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures.
 1. Mandatory vacations
2. Personnel policies
3. Report of outside consultants on future market changes

Accepted Answer

The answer of Identify each of the following as relating...

Question 13

Match the following elements of internal control:
-control procedures

Accepted Answer

Control procedures provide reasonable assurance that business goals will be achieved.

Question 14

Match the following elements of internal control:
-monitoring

Accepted Answer

Monitoring is a process used to locate weaknesses in the internal control system and to improve controls, ensuring they are effective and updated as necessary.

Question 15

NSF check

Accepted Answer

An NSF (Non-Sufficient Funds) check is subtracted from the company's books because it represents a payment that was expected to be received but was not, due to insufficient funds in the payer's account.

Question 16

bank service charge

Accepted Answer

Bank service charges are expenses for the company and are subtracted from the company's books to reflect the decrease in the company's cash balance due to these charges.

Question 17

interest revenue earned by the note above

Accepted Answer

Interest revenue earned by a note is added to the company's books as it increases the company's assets.

Question 18

EFT deposit from a customer

Accepted Answer

EFT (Electronic Funds Transfer) deposits are added to the company's books because they represent an increase in the company's cash balance.

Question 19

outstanding checks

Accepted Answer

Outstanding checks are checks that have been written by the company but have not yet been cleared by the bank. Therefore, they are subtracted from the bank statement balance during the bank reconciliation process to match the company's books.

Question 20

Match each item to a bank statement adjustment, a company books adjustment, or either.
-Deposit in transit

Accepted Answer

Deposits in transit are adjustments on the bank statement side because they represent amounts that have been recorded by the company but not yet reflected on the bank statement.

Quiz 7: Internal Control and Cash

Match each item to a bank statement adjustment, a company books adjustment, or either. -Bank charges

deposit in transit

Match the following elements of internal control: -information and communication

charges for some other company's safe deposit box were posted to your account

a $1,000 note from one of your customers was collected by the bank

List the objectives of internal control and give an example of how each is implemented.

Match each item to a bank statement adjustment, a company books adjustment, or either. -NSF check

Match each item to a bank statement adjustment, a company books adjustment, or either. -Outstanding checks

Match each item to a bank statement adjustment, a company books adjustment, or either. -Note collected by the bank

Match each item to a bank statement adjustment, a company books adjustment, or either. -Error in recording a check

Match each item to a bank statement adjustment, a company books adjustment, or either. -Interest revenue

Identify each of the following as relating to (a) the control environment, (b) risk assessment, or (c) control procedures. 1. Mandatory vacations 2. Personnel policies 3. Report of outside consultants on future market changes

Match the following elements of internal control: -control procedures

Match the following elements of internal control: -monitoring

NSF check

bank service charge

interest revenue earned by the note above

EFT deposit from a customer

outstanding checks

Match each item to a bank statement adjustment, a company books adjustment, or either. -Deposit in transit