Navigation » List of Schools » Glendale Community College » Accounting » Accounting 101 – Financial Accounting » Spring 2021 » Chapter 4 Quiz
Below are the questions for the exam with the choices of answers:
Question #1
A Cash received from the issuance of common stock.
B Cash paid for supplies.
C Cash received from the sale of a used company truck.
D Cash received from a customer.
Question #2
A Be compensated only when the company is profitable.
B Hire an independent auditor.
C Work more than 40 hours per week.
D Personally certify the company’s financial statements.
Question #3
A An error by the bank.
B Deposits outstanding.
C Interest on bank deposit.
D Checks outstanding.
Question #4
A Receipt of cash from bank borrowing.
B Payment of dividends to stockholders.
C Receipt of cash from selling a building.
D Payment for prepaid insurance.
Question #5
A The company should establish formal guidelines to handle cash receipts and make purchases.
B Management periodically determines whether the amount of physical assets agree with the accounting records.
C Important documents should be kept in a safe place, and electronic files should be backed up regularly.
D Employees should be made aware of the company’s internal control policies.
Question #6
A The employee who authorizes payment should also be the employee who prepares the check.
B Employees responsible for making cash disbursements should also be in charge of cash receipts.
C Ensure checks are serially numbered and signed only by authorized employees.
D Require only one signature for larger checks.
Question #7
A In their own best interest.
B As stewards of the company’s assets.
C As creditors of the company.
D As owners of the company.
Question #8
A Allow the company to save cash for major future purchases.
B Pay employee salaries at the end of each period.
C Provide a convenient form of payment for the company’s customers.
D Provide cash on hand for minor expenditures.
Question #9
A File their tax return with the Internal Revenue Service.
B File reports with the Securities and Exchange Commission.
C Use either cash or accrual- basis accounting.
D Use accrual-basis accounting.
Question #10
A Established the Financial Accounting Standards Board.
B Enacted the Securities and Exchange Commission.
C Passed the Sarbanes-Oxley Act.
D Organized the Internal Revenue Service.
Question #11
A Cash received from the issuance of common stock.
B Cash received from the sale of a used company truck.
C Cash paid for supplies.
D Cash received from a customer.
Question #12
A Cash received from the issuance of common stock.
B Cash received from a bank loan.
C Cash received from the sale of a used company truck.
D Cash paid for supplies.
Question #13
A Debit card sales, checks received from customers and coins and currency.
B Debit card sales.
C Checks received from customers.
D Coins and currency.
Question #14
A Increased regulations related to auditor–client relations.
B Increased regulations related to corporate executive accountability.
C Increased regulations related to internal control.
D Increased regulations related to auditor–client relations, increased regulations related to corporate executive accountability and increased regulations related to internal control.
Question #15
A Repayment of borrowed money.
B Services provided to customers on account.
C Payment for employee salaries.
D Payment for a new operating equipment.
Question #16
A Set maximum purchase limits on debit cards and credit cards.
B Make all cash disbursements using cash rather than debit cards or credit cards.
C The employee responsible for making cash disbursements should be in charge of cash receipts.
D The employee who authorizes payments should also prepare the check.
Question #17
A Respond quickly to new opportunities.
B Prevent bankruptcy.
C Maintain normal operations.
D Maintain normal operations, respond quickly to new opportunities and prevent bankruptcy.
Question #18
A The established balance of the fund less all vouchers written during the accounting period.
B The amount of cash used to establish the fund.
C The amount of cash withdrawn from the fund during the accounting period.
D All vouchers written during the accounting period.
Question #19
A Accounts receivable.
B Investments with maturity dates greater than three months.
C Accounts payable.
D Checks received from customers.
Question #20
A Added to the bank’s cash balance.
B Added to the company’s cash balance.
C Subtracted from the company’s cash balance.
D Subtracted from the bank’s cash balance.
Question #21
A NSF check.
B Bank service fees.
C
D Deposits outstanding.
E Interest on bank deposit.
Question #22
A Added to the bank’s cash balance.
B Subtracted from the bank’s cash balance.
C Added to the company’s cash balance.
D
E Subtracted from the company’s cash balance.
Question #23
A Cash on hand to pay for minor purchases.
B Investment in short-term securities.
C Cash used to pay employee salaries.
D Cash held in the bank.
Question #24
A Provide financial statements.
B Provide healthcare for employees.
C File their tax return with the Internal Revenue Service.
D Document and assess internal controls.
Question #25
A Allowing customers to pay with a credit card.
B Recording cash receipts as soon as they are received.
C Requiring the employee receiving the cash from the customer to also deposit the cash into the company’s bank account.
D Allowing customers to pay with a debit card.
Question #26
A Checks outstanding.
B NSF checks.
C Service fees.
D An error by the company.
Question #27
A Improper asset valuation.
B Improper asset valuation, fictitious revenues from a fake customer and mismatching revenues and expenses.
C Mismatching revenues and expenses.
D Fictitious revenues from a fake customer.
Question #28
A Accounting errors made by the bank.
B Accounting errors made by the company.
C Cash theft by the company’s employees.
D Timing differences of recording cash transactions by the company and by the bank.
Question #29
A Payment of dividends to stockholders.
B Payment for land.
C Cash sales to customers.
D Payment for advertising.
Question #30
A $20,000.00
B $90,000.00
C $50,000.00
D $120,000.00
Question #31
A The person who makes deposits should NOT record the deposits.
B The same person who makes deposits should also record the deposits.
C Only checks are used for payment of purchases.
D Only checks are used for payment of purchases and the same person who makes deposits should also record the deposits.
Question #32
A The ethical tone set by top management.
B The reliability of financial information.
C The risk of failing to achieve company objectives.
D Accountability through separation of duties.
Question #33
A Investments in a 6-month Certificate of Deposit.
B Amounts held in checking accounts.
C Prepaid insurance.
D Credit card purchases.
Question #34
A Cash is debited.
B Retained Earnings is debited.
C Accounts Payable is credited.
D Expenses are credited.
Question #35
A Employee fraud is less likely to occur when access to assets and access to accounting records are separated.
B The external auditors of the company should have no contact with managers while the audit is taking place.
C Duties of middle-level managers of the company should be clearly separated from those of top executives.
D The company’s financial accountant should not share information with the company’s tax accountant.
Question #36
A Checks outstanding.
B Deposits outstanding.
C Interest earned.
D An error by the bank.
Question #37
A The company’s top executives.
B The company’s external auditors.
C The company’s stockholders.
D The company’s board of directors.
Question #38
A Supplies Expense.
B Accounts Payable.
C Cash.
D Supplies.
Question #39
A The establishment of the Securities and Exchange Commission (SEC).
B Corporate scandals involving unethical behavior of top executives.
C Increasing inflation.
D Increasing pressure of foreign competition for American products and services.
Question #40
A To help managers determine which projects are likely to be more profitable.
B To minimize tax payments to the Internal Revenue Service (IRS).
C To assist top executives in planning employment capacity.
D To improve the accuracy and reliability of accounting information.