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Question(s) / Instruction(s):

A company which uses special journals should record a transaction involving the purchase of merchandise for cash in a

a)            one column purchases journal.

b)            multi-column purchases journal.

c)            cash payments journal.

d)            general journal.

                                  

 

12. Thompson's Wholesale uses a sales journal.  An entry in this journal represents a

a)            debit to Cash; credit to Sales.

b)            debit to Accounts Receivables; credit to Sales.

c)            debit to Sales Discounts; credit to Cash.

d)            debit to Accounts Payable; credit to Sales Returns and Allowances.

.

 

 

13. A debit balance in Cash Over and Short is reported as a

a)            contra asset.

b)            miscellaneous asset.

c)            miscellaneous expense.

d)            miscellaneous revenue.

 

 

14. The custodian of a company asset should

a)            have access to the accounting records for that asset.

b)            be someone outside the company.

c)            not have access to the accounting records for that asset.

d)            be an accountant.

 

 

15. A petty cash fund of $100 is replenished when the fund contains $5 in cash and receipts for $93.  The entry to replenish the fund would

a)            credit Cash Over and Short for $2.

b)            credit Miscellaneous Revenue for $2.

c)            debit Cash Over and Short for $2.

d)            debit Miscellaneous Expense for $2.

16. Two individuals at a retail store work the same cash register.  You evaluate this situation as

a)            a violation of establishment of responsibility.

b)            a violation of separation of duties.

c)            supporting the establishment of responsibility.

d)            supporting internal dependent verification.

 

17. Joe is warehouse custodian and also maintains the accounting record of the inventory held at the warehouse.  An assessment of this situation indicates

a)            documentation procedures are violated.

b)            independent internal verification is violated.

c)            segregation of duties is violated.

d)            establishment of responsibility is violated.

 

18. A company will usually replace a manual accounting information system with an electronic system as the operations increase in

a)            efficiency.

b)            complexity.

c)            simplicity.

d)            productivity.        

 

19. A company uses a sales journal, cash receipts journal, purchases journal, cash payments journal, and a general journal.  A cash sales return would be recorded in the

a)            sales journal.

b)            cash receipts journal.

c)            cash payments journal.

d)            general journal.

 

 

20. An accounts payable clerk also has access to the approved supplier master file for purchases.  The control principle of

a)            establishment of responsibility is violated.

b)            independent internal verification is violated.

c)            documentation procedures is violated.

d)            separation of duties is violated.

 

 

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