FAR — Financial Accounting & Reporting — Quiz 33

Questions in this quiz (10)

1. Which of the following would reduce the company's book balance during bank reconciliation?

   • Deposits in transit
   • Bank collections
   • Bank service charges
   • Interest earned

2. Which item represents a deposit recorded by the company but not yet processed by the bank?

   • Outstanding checks
   • Deposits in transit
   • NSF checks
   • Bank errors

3. Which internal control requires different employees to handle cash receipts and recording?

   • Monitoring
   • Segregation of duties
   • Authorization procedures
   • Risk assessment

4. Which internal control procedure requires timely deposit of cash receipts?

   • Independent verification
   • Daily cash deposits
   • Monitoring
   • Risk assessment

5. Which of the following represents strong internal control over cash disbursements?

   • Allowing unrestricted access to funds
   • Requiring approval before issuing payments
   • Eliminating documentation
   • Allowing one employee to record and approve

6. Which item appears only on the bank statement?

   • Outstanding checks
   • Deposits in transit
   • Bank service charges
   • Accounts receivable

7. Which account is credited when recording interest earned?

   • Interest revenue
   • Cash
   • Accounts receivable
   • Expense

8. Which internal control activity compares recorded amounts to actual assets?

   • Authorization procedures
   • Monitoring
   • Independent verification
   • Risk assessment

9. Which internal control ensures cash transactions are properly recorded?

   • Adequate documentation
   • Segregation of duties
   • Monitoring
   • Risk assessment

10. Which financial statement shows changes in cash during the period?

    • Balance sheet
    • Income statement
    • Statement of cash flows
    • Statement of retained earnings