Ch 8 Solutions Essay Example
AC 116 MIDTERM QUESTIONS AND ANSWERS
Chapter 8
1. A necessary element of internal control is
a. database
b. systems design
c. systems analysis
d. information and communication
ANS: D
2. An example of a preventive control is
a. the use of a bank account
b. separation of the Purchasing Department and Accounting Department personnel
c. bonding employees who handle cash
d. accepting payment in currency only
ANS: B
3. Under the voucher system, every transaction is recorded at the time of
a. requisitioning
b. ordering
c. incurring
d. paying
ANS: C
4. A debit or credit memorandum describing entries in the depositor's bank account may be enclosed with the bank statement. An example of a credit memorandum is
a. deposited checks returned for insufficient funds
b. a promissory note left for collection
c. a service charge
d. notification that a customer's check for $375 was recorded by the depositor as $735 on the deposit ticket
ANS: B
5. Journal entries based on the bank reconciliation are required in the depositor's accounts for
a. outstanding checks
b. deposits in transit
c. bank errors
d. book errors
ANS: D
6. Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer. What entry is required in the depositor's accounts?
a. debit Notes Receivable; credit Cash
b. debit Cash; credit Miscellaneous Income
c. debit Cash; credit Notes Receivable
d. debit Accounts Receivable; credit Cash
ANS: C
7. Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. What entry is required in the depositor's accounts?
a. debit Other Income; credit Cash
b. debit Cash; credit Other Income
c. debit Cash; credit Accounts Receivable
d. debit Accounts Receivable; credit Cash
ANS: D
8. Which of the following would be subtracted from the balance per bank on a bank reconciliation?
a. Outstanding checks
b. Deposits in
Chapter 8
1. A necessary element of internal control is
a. database
b. systems design
c. systems analysis
d. information and communication
ANS: D
2. An example of a preventive control is
a. the use of a bank account
b. separation of the Purchasing Department and Accounting Department personnel
c. bonding employees who handle cash
d. accepting payment in currency only
ANS: B
3. Under the voucher system, every transaction is recorded at the time of
a. requisitioning
b. ordering
c. incurring
d. paying
ANS: C
4. A debit or credit memorandum describing entries in the depositor's bank account may be enclosed with the bank statement. An example of a credit memorandum is
a. deposited checks returned for insufficient funds
b. a promissory note left for collection
c. a service charge
d. notification that a customer's check for $375 was recorded by the depositor as $735 on the deposit ticket
ANS: B
5. Journal entries based on the bank reconciliation are required in the depositor's accounts for
a. outstanding checks
b. deposits in transit
c. bank errors
d. book errors
ANS: D
6. Accompanying the bank statement was a credit memorandum for a short-term note collected by the bank for the customer. What entry is required in the depositor's accounts?
a. debit Notes Receivable; credit Cash
b. debit Cash; credit Miscellaneous Income
c. debit Cash; credit Notes Receivable
d. debit Accounts Receivable; credit Cash
ANS: C
7. Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. What entry is required in the depositor's accounts?
a. debit Other Income; credit Cash
b. debit Cash; credit Other Income
c. debit Cash; credit Accounts Receivable
d. debit Accounts Receivable; credit Cash
ANS: D
8. Which of the following would be subtracted from the balance per bank on a bank reconciliation?
a. Outstanding checks
b. Deposits in