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Exam 2 Review

Authored by TJ Davies

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Exam 2 Review
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12 questions

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1.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The control features of a bank account do NOT include:

having bank auditors verify the correctness of the bank balance per books

minimizing the amount of cash that must be kept on hand.

providing a double record of all bank transactions.

safeguarding cash by using a bank as a depository.

2.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Eddy Corporation had net revenue during the year of $800,000 and cost of goods sold of $500,000. The balance in receivables at the beginning of the year was $100,000 and at the end of the year was $150,000. What was the accounts receivable turnover?

4.0

5.3

6.4

8.0

3.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The reconciling item in a bank reconciliation that will result in an adjusting entry by the depositor is:

Outstanding checks

Deposit in transit

A bank error

Bank service charges

4.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which control principle does this represent? A Supervisor counts cash daily and reconciles the amount to the general ledger.

Segregation of duties

Independent verification

Establishment of Responsibilities

Documentation procedures

5.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

When there is a change in estimated depreciation:

Previous depreciation should be corrected

Current and future years' depreciation should be revised

Only future years' depreciation should be revised

None of the above

6.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Permitting only designated personnel such as cashiers to handle cash receipts is an application of the principle of:

Segregation of duties

Establishment of responsibility

Independent internal verification

Human resource controls

7.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Hughes Company has a debit balance of $5,000 in its Allowance for Doubtful Accounts before any adjustments are made at the end of the year. Based on review and aging of its accounts receivable at the end of the year, Hughes estimates that $60,000 of its accounts receivable are uncollectible. In this situation, the amount of bad debt expense that should be reported for the year is:

$5,000

$55,000

$60,000

$65,000

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