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