Question : 91.The following information taken from Reagan Company’s December 31 balance : 1236994

91.The following information is taken from Reagan Company’s December 31 balance sheet: 

Cash and cash equivalents$8,419

Accounts receivable70,422

Merchandise inventories60,362

Prepaid expenses4,100

Accounts payable$14,950

Notes payable86,638

Other current liabilities9,500

If net credit sales for the current year were $612,000, the firm’s days’ sales uncollected for the year is:    

A.60 days

B.85 days

C.42 days

D.154 days

E.70 days

92.An income statement account that is used to record cash overages and cash shortages arising from petty cash transactions or from errors in making change is titled:   

A.Cash Lost.

B.Bank Reconciliation.

C.Petty Cash.

D.Cash Over and Short.

E.Cash Receivable.

93.A set of procedures and approvals for verifying, approving and recording obligations for eventual cash disbursement, and for issuing checks for payment only of verified, approved, and recorded obligations is referred to as a(n):   

A.Internal cash system.

B.Petty cash system.

C.Cash disbursement system.

D.Voucher system.

E.Cash control system.

94.Internal control procedures for cash receipts do not require that:   

A.Custody over cash is kept separate from its recordkeeping.

B.All collections for sales are be received immediately upon making the sales.

C.Clerks having access to cash in a cash register should not have access to the register tape or file.

D.An employee with no access to cash receipts should compare the total cash recorded by the register with the record of cash receipts reported by the cashier.

E.Cash sales should be recorded on a cash register at the time of each sale.

95.The Cash Over and Short account:   

A.Is used when the cash account reports a credit balance.

B.Is used to record the income effects of errors in making change and/or processing petty cash transactions.

C.Is not necessary in a computerized accounting system.

D.Can never have a debit balance.

E.Can never have a credit balance.

96.The voucher system of control:   

A.Is a set of procedures and approvals designed to control cash receipts and the acceptance of obligations.

B.Establishes procedures for verifying, approving, and recording obligations for eventual cash disbursement.

C.Establishes procedures for receiving checks for the sale of verified, approved, and recorded activities.

D.Applies only when multiple purchases are made from the same supplier.

E.Is required in large companies but not beneficial for small to mid-sized companies.

97.A voucher is an internal document or file:   

A.Prepared after an invoice is received.

B.Used as a substitute for an invoice if the supplier fails to send one.

C.Used to accumulate information needed to control cash disbursements and to ensure that transactions are properly recorded.

D.Takes the place of a bank check.

E.Prepared before the company orders goods to make sure that all goods are being ordered from an approved vendor list.

98.Which of the following procedures would weaken control over cash receipts that arrive through the mail?   

A.After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender’s name, the amount, and an explanation of why the money is sent.

B.The bank reconciliation is prepared by a person who does not handle cash or record cash receipts.

C.For safety, only one person should open the mail, and that person should immediately deposit the cash received in the bank.

D.The cashier deposits the money in the bank and the recordkeeper records the amounts received in the accounting records.

E.The employees handling the cash receipts are bonded.

99.At the end of the day, the cash register’s record shows $1,050, but the count of cash in the cash register is $1,055. The correct entry to record the cash sales is    

A.Debit Cash $1,055; credit Sales $1,055.

B.Debit Cash $1,055; credit Cash Over and Short $5; credit Sales $1,050.

C.Debit Cash $1,050; credit Sales $1050.

D.Debit Cash $1,050; debit Cash Over and Short $5; credit Sales $1,055.

E.Debit Cash Over and Short $5, credit Sales $5.

100.At the end of the day, the cash register tape shows $1,020 in cash sales but the count of cash in the register is $1,035. The proper entry to account for this excess is:   

A.Debit Cash $1,020; credit Sales $1,020.

B.Debit Cash $1,035; credit Sales $1,035.

C.Debit Cash $1,035; credit Sales $1,020; credit Cash Over and Short $15.

D.Debit Cash $1,020; debit Cash Over and Short for $15; credit Sales $1,035.

E.Debit Cash Over and Short $15; credit Cash $15.