Question 1  

The Purpose of Special Journals is to: 

 

Answer  

A.Reduce the Time to Record Repetitive Transactions.  

B.All of the above.  

C.Reduce the Time to Post Transactions to the General Ledger & Subsidiary Ledgers.  

D.Alllow Several Individuals to Divide Up the Work of Recording Routine Transactions. 

 

Question 2  

When a Company used Special Journals, All of the Following Transactions Would Still be Recorded in the General Journal EXCEPT:

 

Answer  

A.Purchasing Merchandise on Account from a Vendor. 

B.Adjusting Entries. 

C.Accepting a Note Receivable from a Customer. 

D.Closing Entries.

 

Question 3  

Which of the following is NOT a Special Journal?

 

Answer 

A.Sales Journal. 

B.General Journal. 

C.Purchases Journal. 

D.Cash Receipts Journal.

 

Question 4  

Two Commonly Used Subsidiary Ledgers are:

 

Answer  

A.Accounts Receivable & Cash Receipts. 

B.Accounts Receivable & Accounts Payable. 

C.Accounts Payable & Cash Payments 

D.Sales & Cost of Goods Sold.

 

Question 5  

An Entry Recorded in the Sales Journal represents a Debit to the _ _ _ Account & a Credit to the _ _ _ Account. 

 

Answer 

A……….Debit………………….Credit

Accounts Receivable………Sales 

B.Cash……………………………Sales 

C.Sales Discounts…………….Cash 

D.Accounts Payable………….Sales Returns & Allowowances

 

Question 6  

Which of the following Transactions would NOT be Recorded in the Cash Receipts Journal?

 

Answer  

A.Cash Sales of Merchandise. 

B.Credit Sales of Merchandise. 

C.Collections from Charge Account Customers. 

D.Collection of a Note Receivable.

 

Question 7  

An Entry in the “Other Accounts” Column of the Cash Receipts Journal could Occur where the Credit is to:

 

Answer 

A.Owner’s Capital account. 

B.Owner’s Drawing account. 

C.Accounts Payable account. 

D.Merchandise Inventory account.

 

Question 8  

Which of the Following Lines Correctly Describes the Balances of each of the Columns in the Cash Payments Journal shown below? 

 

Answer  

A.Other…….Accounts……..Merchandise

Accts……..Payable…………Inventory…………Cash

.Debit……….Debit………………Credit……………Credit

 

B..Debit……….Credit……………..Credit……………Debit

 

C..Debit……….Credit……………..Credit……………Credit

 

D..Credit………Credit……………..Credit……………Credit

 

Question 9  

The Accounts Receivable Ledger: 

 

Answer  

A.All of the above.  

B.Supports & Explains the Controlling Accts. Receivable in the General Ledger.  

C.Contains a Separate Account for each Charge Customer.  

D.Is a Subsidiary Ledger. 

 

Question 10  

A Company Stamps All Checks in the Mail with the Words “For Deposit Only.”  This Type of Endorsement is called:

 

Answer 

A.A Blank Endorsement. 

B.A Rubber Stamp. 

C.A Restricitive Endorsement. 

D.An Operational Endorsement.

 

Question 11  

When a Customer’s NSF (Non-Sufficient Funds) Check is Returned by the Bank, to a Firm which Deposited it in its Checking Account, it has the Effect of: 

 

Answer  

A.Increasing its Cash Balance & Increasing its Accounts Receivable.  

B.Decreasing its Cash Balance & Decreasing its Accounts Receivable. 

C.Decreasing its Cash Balance & Increasing its Accounts Receivable.  

D.Increasing its Cash Balance & Decreasing its Accounts Receivable. 

 

Question 12  

In Preparing a Bank Reconciliation, a “Deposit in Transit” would be:

 

Answer  

A.Deducted from the Bank Balance of Cash. 

B.Deducted from the Book Balance of Cash. 

C.Added to the Book Balance of Cash. 

D.Added to the Bank Balance of Cash.

 

Question 13  

The Petty Cash Fund should be Replensished to its Original Level: 

 

Answer 

A.At the end of the month.  

B.Only when it is completely spent.  

C.At the end of the fiscal year.  

D.Whenever the Petty Cashier feels like it. 

 

Question 14  

Which of the Following is NOT One fo the Factors in the “Triangle of Fraud” that Contributes to Fraudulent Activity by Employees? 

 

Answer  

A.Rationalization that they are only borrowing or job disatisfaction  

B.Collusion by several employees who agree to cooperate in committing a fraud.  

C.Opportunity because of weak internal controls or poor management oversight.  

D.Financial pressured caused by medical bills, expensive tastes, addiction, etc. 

 

Question 15 

A Check was Written to the Telephone Company for $74 but was Recorded in the Journal & Posted to the Ledger for $47.  The General Journal to Correct the Initial Error is: 

 

Answer  

A.Cash…………………………….$27

     Telephone Expense……………$27

 

B.Telephone Expense………..$27

     Cash………………………………..$27

 

C.Accounts Payable…………..$27

     Telephone Expense……………$27    

 

D.Telephone Expense………..$27

     Accounts Payable ……………..$27

 

Question 16  

An Initial Petty Cash Fund in the Amount of $150 was Established.  The Correct General Journal Entry to Record this Transaction is:

 

Answer  

A.None of the above. 

B.Petty Cash………………………$150

      Cash………………………………….$150 

C.Petty Cash………………………$150

      Miscellaneous Expense…………$150 

D.Cash………………………………$150

      Petty Cash………………………….$150

 

Question 17   

Policies & procedures used by a business to protect its assets from theft, fraud & to increase the accuracy of accounting records by reducing errors and irregularities. They include clearly defined responsibilities & separation of duties. 

A group of similar accounts containing detailed information such as the charges & payments by customers or the amounts the company owes to individual vendors.  

 

Checks that have been written and recorded in the company’s accounting records but have not yet reached the bank for payment & hence have not been deducted from the bank balance by the time the bank issues its statement. 

 

A specialized journal used to record all inflows of cash including collections from customers on their accounts & cash sales of merchandise. 

 

A fund used to make small immediate cash payments without the trouble of writing out numerous checks for small, insignificant amounts. 

 

A form which is prepared monthly to bring the bank statement’s cash balance into agreement with the checking account balance of the business by adding & subtracting various items from each balance.

 

Deposits which have been made & are recorded in the company’s accounting records but were not made in  time time for the bank to add them to the bank balance when the bank issued its statement.

 

A specialized journal used to record all outflows of cash including payments on account to vendors & cash purchases of merchandise and supplies. 

 

An account in the general ledger that summarizes the balances of a related subsidiary ledger.  Examples include the Accounts Receivable & Accounts Payable accounts. 

 

An account used to record discrepancies between the actual amount of cash remaining in the petty cash fund & the amount that should be in the fund based on receipts for expenditures in the box.  Its balance is reported as Miscellaneous Expense or Miscellaneous Revenue on the Income Statement. 

 

An insurance policy that covers business policyholders for losses that they incur as a result of dishonest & fraudulent acts by its employees. 

 

A check from a customer which was deposited by a business in its checking account but which has been returned by the bank because of nonsufficient funds.  The customer still owes the amount because of the “bounced” check. 

 

Answer

A.Outstanding Checks 

B.Internal Controls 

C.Cash Over & Short Acct. 

D.Bank Reconciliation 

E.Controlling Account 

F.Cash Receipts Journal 

G.Deposits in Transit 

H.NSF Check 

I.Subsidiary Ledger 

J.Fidelity Bond 

K.Cash Payments Journal 

L.Petty Cash Fund 

 

Question 18 

The Cash Payments Journal contained the following Columns & Totals.   What is the Total $ Amount of the Debit Columns of the Cash Payments Journal?

 

$2,800…Other Accounts

$4,500…Accounts Payable

$   100…Merchandise Inventory

$7,200…Cash

 

Question 19  

The Cash Receipts Journal Contained the following Columns and Totals.  What is the Total $ Amount of the Credit Columns of the Cash Receipts Journal?

 

$9,300…Cash

$  100….Sales Discount

$4,600…Accounts Receivable

$2,900…Sales

$1,900…Other Accounts

$2,100…Cost of Goods Sold  & Merchandise Inventory

 

Question 20 

Based on the following information, What is the Balance in the Controlling Accounts Receivable Account at the End of the Month? 

 

At the Beginning of the Month, the Accounts Receivable Subsidiary Ledger showed the following Balances for its Customers:

Anderson Company $5,000 …. Barrington Company $7,000

During the Month Credit Sales made to is Customers were as follows:

Anderson Company $6,000 …. Barrington Company $4,500 …. Carter Company $8,500

During the Month Cash Collected on Account from its Customers were as follows:

Barrington Company $4,500 …. Carter Company $3,000

 

Question 21  

When the Petty Cash Fund shown below is Replenished, Should the General Journal Entry include a Debit or a Credit to the Cash Over & Short Account?

 

$100….Beginning Petty Cash Balance

$    5….Ending Cash in Petty Cash Box

$  93….Voucher Receipts in Petty Cash Box

 

Question 22  

What should be the $ Amount of the Geneal Journal entry to the Cash Over & Short account in the previous question. 

 

Question 23  

Using the Bank Reconciliation Items below, What is the $ Amount of the True Reconciled Ending Cash Balance?

 

$3,100….Beginning Bank Balance

$   800….Collection of Note Receivable by Bank

$1,500….Deposits in Transit (not on Bank Stmt.)

$   100….Bank Checking Acct. Service Charges

$2,400….Beginning Checkbook Balance

$1,800….Outstanding Checks (not on Bank Stmt.)

$   300….NSF Customer Check returned by Bank