Question :
11) When a company receives cash by mail:
A) all incoming : 1230140
11) When a company receives cash by mail:
A) all incoming mail containing cash receipts should be opened by the accounting department.
B) the mailroom sends all customer checks to the internal audit department.
C) the remittance advice goes to the accounting department for preparation of the journal entries.
D) the bank deposit is prepared by the mail room.
12) Cash requires specific internal controls because:
A) cash is one of the most difficult assets to steal.
B) cash is difficult to convert to other forms of wealth.
C) all transactions ultimately affect cash.
D) cash is difficult to conceal.
13) Which of the following is an accurate statement regarding cash receipts over the counter?
A) The point-of-sale terminal electronically transmits a record of the sale to the store’s main computer.
B) Employees should take the deposit to the bank.
C) The cashier should reconcile the electronic record of the sales per the terminal to the record of cash received.
D) Point-of-sale terminals cannot assist in inventory control.
14) Depository bank accounts are an efficient way to manage cash since:
A) the treasurer is the only person authorized to perform the bank reconciliation on this type of account.
B) dual signatures are needed for all withdrawals.
C) corporate headquarters can quickly transfer the money to the company’s centralized account.
D) the account earns a high rate of interest.
15) When cash is received by mail:
A) the mailroom sends all customer checks to the treasurer, who has the cashier deposit the money in the bank.
B) the journal entries are made by the controller.
C) the mailroom compares the deposit to the journal entry made.
D) all of the above occur.
16) With a lock-box system:
A) customers send their checks by mail directly to a post office box controlled by the company.
B) the bank posts the deposits to the company’s accounts receivable account.
C) company personnel never touch the incoming cash.
D) it takes more time for the cash to be deposited into the company’s bank account.
17) Payment by check is an important internal control since:
A) the check provides a record of the payment.
B) the check must be signed by an authorized official who should study the evidence supporting the payment.
C) all checks must be approved by the bank’s internal audit department before they are paid.
D) both A and B are true.
18) For good internal control:
A) the purchasing agent should also receive the goods.
B) the purchasing agent should also approve the invoice for payment.
C) the purchasing agent should not receive the goods or approve the invoice.
D) the purchasing agent should not order the goods.
19) A purchase order:
A) identifies the need for merchandise and begins the purchasing process.
B) identifies that the merchandise has been received and ends the purchasing process.
C) is sent by the purchasing department to the customer who purchases the item.
D) includes the invoice, receiving report, purchase order and purchase request.
20) Once the company receives the inventory, it prepares a(n) ________ to list the goods received.
A) invoice
B) purchase approval form
C) receiving report
D) EFT transfer
