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