Question 1

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Corporate bonds maturing in 30 days
A)Included
B)Excluded

Accepted Answer

Corporate bonds maturing in 30 days should be excluded from the line item titled Cash and cash equivalents on the balance sheet because they are not cash or a highly liquid instrument that can be readily converted into cash.

Question 2

Match the action with the category of internal control procedures
-Design and use of business documents
A)One department should check on another
B)Internal audit staff ensure all is working as intended
C)Accounting and cash collection is properly separated
D)Blank checks are locked at all times when not in use
E)Origination of initial entry into accounting system
F)Specific authority is given by management for the performance of activities.

Accepted Answer

The design and use of business documents relate to the origination of initial entry into the accounting system, ensuring that transactions are properly recorded and authorized.

Question 3

Match the following terms with the best definitions for questions 212 through 219.
-Actions that company personnel take to make sure that policies set forth by management are followed.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

Control procedures are actions taken to ensure that the policies and procedures set forth by management are adhered to by company personnel. These can include various checks and balances, monitoring mechanisms, and other processes designed to ensure compliance with internal policies and external regulations.

Question 4

Match the following terms with the best definitions for questions 212 through 219.
-An example of design and use of business documents control.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

Source document control refers to the management and oversight of documents that originate transactions or serve as evidence of business activities, ensuring their accuracy, integrity, and security. This encompasses the design and use of business documents to control operations, including those listed (A-G), making it the best match for the example provided.

Question 5

Match the following terms with the best definitions for questions 212 through 219.
-An example of independent verification.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

An inventory count is an example of independent verification as it involves physically counting inventory to ensure records match actual stock, providing an independent check on the accuracy of inventory records.

Question 6

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Petty cash
A)Included
B)Excluded

Accepted Answer

Petty cash should be included in the line item titled Cash and cash equivalents on the balance sheet as it represents small amounts of cash kept on hand for minor expenses.

Question 7

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Savings account
A)Included
B)Excluded

Accepted Answer

Savings account is a highly liquid asset that can be easily converted into cash, and thus should be included in the line item titled Cash and cash equivalents on the balance sheet.

Question 8

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Certificate of deposit maturing in 60 days
A)Included
B)Excluded

Accepted Answer

Certificate of deposit maturing in 60 days is included in cash and cash equivalents as it is a highly liquid investment that can be quickly converted into cash without significant risk of value loss.

Question 9

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Certificate of deposit maturing in six months
A)Included
B)Excluded

Accepted Answer

Certificates of deposit maturing in six months are typically excluded from cash and cash equivalents because they do not meet the criteria of being readily convertible to a known amount of cash without significant risk of change in value.

Question 10

Match the following terms with the best definitions for questions 212 through 219.
-A form used for verification that the items originally requested have been received.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

A Receiving Report is a document used to verify that the items ordered have been received and often includes details about the quantity and condition of the goods.

Question 11

Match the following terms with the best definitions for questions 212 through 219.
-Form sent by the seller to the buyer as evidence of a sale
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

A vendor invoice is the document sent by the seller to the buyer, detailing the sale transaction and requesting payment. It serves as evidence of a sale.

Question 12

Blairsville Corp.prepares monthly bank reconciliations of its checking account balance.The bank statement for July 2016 indicated the following: $\begin{array}{lr}
\text { Balance, July } 31,2016 & \$ 63,400 \
\text { Service charge for July } & 160 \
\text { Interest earned during July } & 100 \
\text { NSF check from Black Corp. (deposited by Blairsville) } & 1,150 \
\text { Note }(\$ 3,000) \text { and interest }(\$ 80) \text { collected for Blairsville from a } & 3,080 \
\text { customer of Blairsville's } &
\end{array}$ ​
An analysis of canceled checks and deposits and the records of Blairsville revealed the following items: $\begin{array}{lr}
\text { Checking account balance per Blairsville's books } & \$ 58,770 \
\text { Outstanding checks as of July } 31 & 4,630 \
\text { Deposit in transit at July } 31 & 1,780 \
\text { Error in recording check \#205 issued by Blairsville } & 90\
\end{array}$ ​
The correct amount of check #205 is $540, but it was recorded as a cash disbursement of $450.The check was issued to pay for merchandise purchases.The check appeared on the bank statement correctly.
A) Prepare a bank reconciliation schedule at July 31, 2016, in proper form.
​
B) What amount would Blairsville report on its balance sheet at July 31, 2016, for cash?
​

Accepted Answer

The answer of Blairsville Corp.prepares monthly bank reconciliations of its...

Question 13

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Certified check
A)Included
B)Excluded

Accepted Answer

Certified checks are considered as cash and thus should be included in the line item titled Cash and cash equivalents on the balance sheet.

Question 14

Lakeland Enterprises invested its excess cash in the following instruments during December 2016: $\begin{array}{lr}
\text { Certificate of deposit, due January 31,2019 } & \$ 85,000 \
\text { Certificate of deposit, due March 30, } 2017 & 120,000 \
\text { Commercial paper, original maturity date February } 28,2017 & 105,000 \
\text { Deposit into a money market fund } & 45,000 \
\text { Investment in stock } & 55,000 \
90-\text { day Treasury bills } & 110,000 \
\text { Treasury note, due December } 1,2044 & 400,000
\end{array}$ Required:
Determine the amount of cash equivalents that should be combined with cash on the company's balance sheet at December 31, 2016, and for purposes of preparing a statement of cash flows for the year ended December 31, 2016.

Accepted Answer

The answer of Lakeland Enterprises invested its excess cash in...

Question 15

Match the following terms with the best definitions for questions 212 through 219.
-The practice of not combining physical custody of assets with the function of accounting for those assets.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

Segregation of duties is a key control procedure that involves separating the responsibilities of custody of assets from the accounting for those assets to prevent fraud and errors.

Question 16

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Shares of GM stock
A)Included
B)Excluded

Accepted Answer

Shares of stock are not typically considered cash or cash equivalents and should be excluded from the line item titled Cash and cash equivalents on the balance sheet.

Question 17

Match the following terms with the best definitions for questions 212 through 219.
-Used to prepare a purchase order.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

A purchase requisition is a document used by a department to request that a purchase order be prepared for goods or services.

Question 18

Match the following terms with the best definitions for questions 212 through 219.
-Typically sent along with a remittance advice.
A)Purchase requisition.
B)Receiving Report.
C)Vendor Invoice.
D)Check.
E)Control procedures.
F)Inventory count.
G)Segregation of duties.
H)Source document control.

Accepted Answer

A check is typically sent along with a remittance advice to indicate the purpose of the payment, ensuring that the payment is applied correctly by the recipient.

Question 19

Euro Corp.began the year with $19,000 in cash and another $1,000 in cash equivalents.During the year, operations generated $132,000 in cash.Net cash used in investing activities during the year was $213,000, and the company raised a net amount of $168,000 from financing activities.
Required:
Determine the year-end balance in cash and cash equivalents.

Accepted Answer

The answer of Euro Corp.began the year with $19,000 in...

Question 20

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet.
-Checking account
A)Included
B)Excluded

Accepted Answer

Checking accounts are considered cash and should be included in the Cash and cash equivalents line item on the balance sheet.

Quiz 6: Cash and Internal Control

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Corporate bonds maturing in 30 days

Match the action with the category of internal control procedures -Design and use of business documents

Match the following terms with the best definitions for questions 212 through 219. -Actions that company personnel take to make sure that policies set forth by management are followed.

Match the following terms with the best definitions for questions 212 through 219. -An example of design and use of business documents control.

Match the following terms with the best definitions for questions 212 through 219. -An example of independent verification.

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Petty cash

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Savings account

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Certificate of deposit maturing in 60 days

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Certificate of deposit maturing in six months

Match the following terms with the best definitions for questions 212 through 219. -A form used for verification that the items originally requested have been received.

Match the following terms with the best definitions for questions 212 through 219. -Form sent by the seller to the buyer as evidence of a sale

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Certified check

Match the following terms with the best definitions for questions 212 through 219. -The practice of not combining physical custody of assets with the function of accounting for those assets.

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Shares of GM stock

Match the following terms with the best definitions for questions 212 through 219. -Used to prepare a purchase order.

Match the following terms with the best definitions for questions 212 through 219. -Typically sent along with a remittance advice.

For the following items Questions 220-227, indicate whether each should be (a) included or (b) excluded from the line item titled Cash and cash equivalents on the balance sheet. -Checking account