Intermediate Accounting 1 - 02 Quiz 1 - ARG

Question 1
Which of the following would most likely NOT appear as a reconciling item on a bank reconciliation prepared at the end
of October?

Response: Checks which were disbursed and recorded by the depositor in July and were paid by the bank during August.

Correct answer: Checks which were disbursed and recorded by the depositor in July and were paid by the bank during
August.

Score: 1 out of 1 Yes

Question 2
What are outstanding checks?

Response: Depositor’s checks which have not yet cleared the banking system

Correct answer: Depositor’s checks which have not yet cleared the banking system

Score: 1 out of 1 Yes

Question 3
What is the best way to discourage a sales clerk from using sales invoice to make a cash sale to a customer and then
pocketing the cash and destroying the company’s copy of the sales invoice?

Response: Serialization of sales invoice

Correct answer: Serialization of sales invoice

Score: 1 out of 1 Yes

Question 4
Which of the following is a main objective of a good system of internal control?
Response: Prevent error and irregularities in the accounting records.

Correct answer: Prevent error and irregularities in the accounting records.

Score: 1 out of 1 Yes

Question 5
What is the basic internal control that is being applied when the work assignment for one (1) employee is designed to
check on the work of another employee?

Response: Independent internal verification

Correct answer: Independent internal verification

Score: 1 out of 1 Yes

Question 6
Which of the following would NOT accompany a monthly bank statement?

Response: Copies of outstanding check at the end of the month

Correct answer: Copies of outstanding check at the end of the month

Score: 1 out of 1 Yes

Question 7
What is another term for irregularities?

Response: Fraud

Correct answer: Fraud

Score: 1 out of 1 Yes

Question 8
It is the minimum account balance that the company agrees to maintain as a support or collateral for a loan of a depositor.

Response: Compensating balance

Correct answer: Compensating balance

Score: 1 out of 1 Yes

Question 9
It is an extensive network of approvals by authorized individuals acting independently to ensure that all disbursements by
check are proper.

Response: Voucher system

Correct answer: Voucher system

Score: 1 out of 1 Yes

Question 10
What is the effect of a debit memorandum issued by a bank?

Response: Decreases the depositor’s account balance

Correct answer: Decreases the depositor’s account balance

Score: 1 out of 1