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Which of the following would NOT represent good controls over cash receipts

Which of the following would NOT represent good controls over cash receipts?

a. Record all cash receipts as soon as possible.

b. The employee that receives cash and checks should also deposit them in the bank.

c. Open mail each day and make a list of checks received with the amount and payer’s name.

d. Verify cash receipts by comparing the bank deposit slip with the accounting records.

 

 

87. Which of the following would NOT be recorded as a cash sale?

a. Customer who pays with a check.

b. Customer who pays with a debit card.

c. Customer who pays with a credit card.

d. A customers who buys on account.

 

 

88. McGregor Company allows customers to pay with credit cards. The credit card company charges McGregor 3% of the sale. When a customer uses a credit card to pay McGregor $200 for services provided, McGregor would:

a. Debit Cash for $200.

b. Credit Service Revenue for $194.

c. Debit Service Fee Expense for $6.

d. Credit Service Revenue for $206.

 

 

89. A customer purchased a $2,000 item at ApplianceWorld, paying with a credit card. ApplianceWorld is charged a 2% fee by the credit card company. When recording this sale, ApplianceWorld would:

a. Debit Accounts Receivable for $2,000.

b. Credit Sales Revenue for $2,000.

c. Credit Sales Revenue for $1,960.

d. Credit Unearned Revenue for $2,000.

 

 

90. Which of the following would NOT represent good controls over cash disbursements?

a. Make all disbursements, other than very small ones, by check, debit card, or credit card.

b. Require only one signature for checks, especially larger ones.

c. Authorize all expenditures before purchase and verify the accuracy of the purchase itself.

d. The employee who authorizes payment should not also be the employee who prepares the check.

 

 

91. Which of the following would NOT represent good controls over cash disbursements?

a. Periodically check amounts shown in the debit card and credit card statements against purchase receipts.

b. The employee verifying the accuracy of the debit card and credit card statements should not also be the employee responsible for actual purchases.

c. Set maximum purchase limits on debit cards and credit cards.

d. Employees responsible for making cash disbursements should also be in charge of cash receipts.

 

 

92. Which of the following would not be considered good internal control for cash receipts?

a. Allowing customers to pay with a debit card.

b. Requiring the employee receiving cash from customers to also deposit the cash into the company’s bank account.

c. Recording cash receipts as soon as they are recorded.

d. Allowing customers to pay with a credit card.

 

 

 

93. After preparing the bank reconciliation, an NSF check would result in which of the following when recording the adjustment to the company’s cash balance?

a. Debit to Service Fee Expense.

b. Credit to Accounts Payable.

c. Credit to Service Revenue.

d. Debit to Accounts Receivable.

 

 

94. The following information pertains to Sooner Company’s cash balance and bank reconciliation as of August 31:

 

Company balance before reconciliation

$5,000

Checks outstanding

$2,500

Notes collected by the bank

$2,200

Service fee

$50

Deposits outstanding

$2,000

What is the correct cash balance for Sooner Company?

a.

$7,150.

b.

$5,150.

c.

$7,650.

d.

$7,250.

 

 

95. When preparing a bank reconciliation, a deposit outstanding would be:

a. Added to the company’s cash balance.

b. Added to the bank’s cash balance.

c. Subtracted from the company’s cash balance.

d. Subtracted from the bank’s cash balance.

Jan 27 2020 View more View Less

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