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A voucher system is a set of procedures and approvals designed to control cash disbursements and the acceptance of obligations.

A) True
B) False

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A credit memorandum on a bank statement indicates:


A) An increase in the bank's asset account.
B) A decrease in the bank's asset account.
C) A decrease in the bank's liability account.
D) An increase in the bank's liability account.
E) An increase in the bank's expense account.

F) A) and E)
G) B) and D)

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Which internal control principle prescribes the use of pre-numbered printed checks?


A) Technological controls.
B) Maintain adequate records.
C) Perform regular and independent reviews.
D) Establish responsibilities.
E) Divide responsibility for related transactions.

F) None of the above
G) A) and B)

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When reimbursing the petty cash fund:


A) Cash is debited.
B) Petty Cash is credited.
C) Petty Cash is debited.
D) Appropriate expense accounts are debited.
E) No expenses are recorded.

F) B) and C)
G) None of the above

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Harsh penalties exist for violators of the Sarbanes-Oxley Act (SOX)- sentences up to 25 years in prison with severe fines.

A) True
B) False

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Childers Company,which uses a perpetual inventory system,has an established petty cash fund in the amount of $400.The fund was last reimbursed on November 30.At the end of December,the fund contained the following petty cash receipts: Childers Company,which uses a perpetual inventory system,has an established petty cash fund in the amount of $400.The fund was last reimbursed on November 30.At the end of December,the fund contained the following petty cash receipts: If,in addition to these receipts,the petty cash fund contains $201 of cash,the journal entry to reimburse the fund on December 31 will include: A) A debit to Transportation-In of $62. B) A debit to Petty Cash of $189. C) A credit to Office Supplies of $30. D) A credit to Cash Over and Short of $10. E) A credit to Cash of $199. If,in addition to these receipts,the petty cash fund contains $201 of cash,the journal entry to reimburse the fund on December 31 will include:


A) A debit to Transportation-In of $62.
B) A debit to Petty Cash of $189.
C) A credit to Office Supplies of $30.
D) A credit to Cash Over and Short of $10.
E) A credit to Cash of $199.

F) A) and B)
G) All of the above

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The treasurer of a company is responsible for cash management.List five cash management principles that are essential for effective cash management.

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Encourage collection of receivables by s...

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The number of days' sales uncollected:


A) Is used to evaluate the liquidity of receivables.
B) Is calculated by dividing accounts receivable by sales.
C) Measures a company's ability to pay its bills on time.
D) Measures a company's debt to income.
E) Is calculated by dividing sales by accounts receivable.

F) A) and B)
G) B) and C)

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Cash registers,time clocks and personal identification scanners are examples of technologies that can improve internal control.

A) True
B) False

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Pelcher Co.maintains a $400 petty cash fund.On January 31,the fund is replenished.The accumulated receipts on that date represent $110 for office supplies,$140 for merchandise inventory,and $70 for miscellaneous expenses.There is a cash overage of $4.The journal entry to replenish the fund on January 31 is:


A) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$324.
B) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Cash,$324.
C) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Petty cash,$316.
D) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Cr.Cash over and short,$4; Cr.Cash,$316.
E) Dr.Office Supplies,$110; Dr.Merchandise inventory,$140; Dr.Miscellaneous expenses,$70; Dr.Cash over and short,$4; Cr.Petty cash,$400.

F) All of the above
G) None of the above

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