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Homework answers / question archive / University of Utah ACCTG 2600 CHAPTER 4 QUIZ 1)Which internal control activity is followed when inventory storage areas are secured with limited access? a

University of Utah ACCTG 2600 CHAPTER 4 QUIZ 1)Which internal control activity is followed when inventory storage areas are secured with limited access? a

Accounting

University of Utah

ACCTG 2600

CHAPTER 4 QUIZ

1)Which internal control activity is followed when inventory storage areas are secured with limited access?

a.            Clearly defined authority and responsibility

b.            Segregation of duties

c.             Safeguarding of assets and records        

d.            Checks on recorded amounts

 

2.            Cash collected and recorded by a company but not yet reflected in a bank statement are known as:

a.            Outstanding checks.

b.            Deposits in transit.         

c.             Debit memos.

d.            Credit memos.

 

3.            If a company erroneously records a $500 deposit as $50 in its records, which of the following must occur when reconciling its bank statement?

a.            The company must decrease the balance per its records by $450.

b.            The company must decrease the balance per its records by $500.

c.             The company must increase the balance per its records by $500. d. The company must increase the balance per its records by $450.

 

4.            Which of the following statements best describes the term "outstanding check" from a company's point of view?

a.            A check written by a customer to the company, but it has not yet been presented to the bank for payment.

b.            A check written by the company and presented to the bank for payment.

c.             A check written by a customer to the company, and the check has been presented to the bank for payment.

d.            A check written by the company but not yet presented to the bank for payment.

 

 

5.            Having one employee prepare company checks and sign those checks relates to which internal control activity?

a.            A good example of checks on recorded amounts

b.            A good example of clearly defined authority and responsibility c.              A violation of proper segregation of duties 

d. A violation of adequate documents and records

 

 

 

The items listed below were identified while preparing a bank reconciliation for the company’s checking ac- count as of March 31, 2013 for Dance Town Academy.

 

Cash balance according to the general ledger      $17,190

Bank statement balance               18,500

Outstanding checks        2,700

Customer's bounced check         350

Bank service charges      100

Deposits in transit            1,000

Interest earned on the checking account              60

 

6.            Refer to Dance Town Academy. How will the deposits in transit be handled on a bank reconciliation?

a.            add to the balance from the company records

b.            subtract from the balance from the company records c. add to the bank statement balance 

d. subtract from the bank statement balance

 

7.            Refer to Dance Town Academy. How will the customer's bounced checks be handled on a bank recon- ciliation? (note: ‘bounced check’ means the bank rejected a check that the company had received from a customer and deposited with the bank.    So the company would not have known the check bounced until they saw it on the bank records)

a.            add to the balance from the company records

b.            add to the bank statement balance

c.             subtract from the bank statement balance

d.            subtract from the balance from the company records

 

8.            Refer to Dance Town Academy. How will the interest earned on the checking account be handled on a bank reconciliation (assume the Company had not recorded the interest yet)?

a.            add to the balance from the company records 

b.            subtract from the balance from the company records

c.             add to the bank statement balance

d.            subtract from the bank statement balance

 

9.            Refer to Dance Town Academy. How will the outstanding checks be handled on a bank reconciliation? a. subtract from the bank statement balance 

b.            add to the bank statement balance

c.             subtract from the balance from the company records

d.            add to the balance from the company records

 

10.          Refer to Dance Town Academy. How will the bank services charges be handled on a bank reconciliation? a. subtract from the balance from the company records 

b.            add to the bank statement balance

c.             add to the balance from the company records

d.            subtract from the bank statement balance

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