Acct 220 Quiz 3

ACCT 220 Quiz 3

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1 . Internal control is defined, in part, as a plan that safeguards
a. all balance sheet accounts.
b. assets.
c. liabilities.
d. capital stock.

2. Having one person responsible for the related activities of ordering merchandise, receiving goods, and paying for them
a. increases the potential for errors and fraud.
b. decreases the potential for errors and fraud.
c. is an example of good internal control.
d. is a good example of safeguarding the company's assets.

3. Control over cash disbursements is generally more effective when
a. all bills are paid in cash.
b. disbursements are made by the accounts payable subsidiary clerk.
c. payments are made by check.
d. all purchases are made on credit.

4. An employee authorized to sign checks should not record
a. owner cash contributions.
b. mail receipts.
c. cash disbursement transactions.
d. sales transactions.

5.. The relationship between current liabilities and current assets is
a. useful in determining income.
b. useful in evaluating a company's liquidity.
c. called the matching principle.
d. useful in determining the amount of a company's long-term debt.


6. In preparing its bank reconciliation for the month of April 2014, Delano, Inc. has available the following information.
Balance per bank statement, 4/30/14 $78,600
NSF check returned with 4/30/14 bank statement 940
Deposits in transit, 4/30/14 10,000
Outstanding checks, 4/30/14 10,400
Bank service charges for April 60
What should be the adjusted cash balance at April 30, 2014?
a. $77,260.
b. $77,600.
c. $78,020.
d. $78,200.

7. Which one of the following items is not considered a part of the cost of a truck purchased for business use?
a. Sales tax
b. Truck license
c. Freight charges
d. Cost of lettering on side of truck

8. The four subdivisions for plant assets are
a. land, land improvements, buildings, and...