FAR — Financial Accounting & Reporting — Quiz 34

Questions in this quiz (10)

1. Which of the following is deducted from the bank balance during reconciliation?

   • Deposits in transit
   • Outstanding checks
   • Bank interest
   • Bank collections

2. Which internal control protects cash from theft?

   • Locked storage and restricted access
   • Eliminating reconciliations
   • Allowing unrestricted access
   • Removing documentation

3. Which record is used to compare the company's cash balance with bank activity?

   • Income statement
   • Bank statement
   • Accounts payable ledger
   • Inventory report

4. What is the primary goal of internal control over cash?

   • Eliminate all risks
   • Safeguard cash and ensure accurate reporting
   • Increase revenue
   • Replace accounting systems

5. What is the purpose of internal control over cash disbursements?

   • Eliminate errors
   • Ensure payments are authorized and recorded
   • Increase revenues
   • Eliminate reconciliations

6. Which document authorizes payment to suppliers?

   • Purchase order
   • Sales invoice
   • Receiving report
   • Voucher

7. Which control ensures payments are made only for valid expenses?

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

8. Which control verifies accuracy of recorded cash transactions?

   • Risk assessment
   • Independent verification
   • Authorization procedures
   • Physical safeguards

9. Which best describes a petty cash fund?

   • Fund for major purchases
   • Small amount used for minor expenses
   • Payroll account
   • Investment account

10. Which journal entry establishes a petty cash fund?

    • Debit Petty Cash; Credit Cash
    • Debit Expense; Credit Petty Cash
    • Debit Cash; Credit Petty Cash
    • Debit Revenue; Credit Cash