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