Question 1

The accounting entries to record the establishment of a petty cash fund are:

Accepted Answer

A)   Debit Petty Cash Expenses; Credit Cash at Bank
B)   Debit Petty Cash; Credit Cash at Bank
C)   Debit Petty Cash; Credit Petty Cash Payable
D)   Debit Cash at Bank; Credit Petty Cash Payable
E)   Debit Account Expenses; Credit Cash at Bank

Question 2

On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Accepted Answer

A)   Debit Taxi Expenses; Credit Cash at Bank
B)   Debit Petty Cash; Credit Cash at Bank
C)   Debit Taxi Expenses; Credit Petty Cash
D)   Debit Taxi Expenses; Credit Accounts Payable
E)   Debit Accounts Payable; Credit Petty Cash A

Question 3

Which of the following statements is untrue?

Accepted Answer

A)   The most effective internal control procedures are preventative, ie, they are designed to avoid inefficiencies or theft occurring.
B)   An example of a theft avoidance procedure is to require cash to always be held in a locked safe.
C)   An example of a theft detection procedure would be to conduct a surprise search of employee bags as staff leave the hotel.
D)   Control is best achieved when completion of a particular task is assigned to three or more people.
E)   Internal audits generally involve an appraisal of the extent to which document procedures are adhered to.

Question 4

Which of the following does not represent an internal control procedure?

Accepted Answer

A)   Preparing written procedure manuals
B)   Segregating physical assets from computer hardware
C)   Use of mechanical and electronic devices
D)   Physical controls
E)   All of the above represent internal control procedures

Question 5

Which of the following statements is true?

Accepted Answer

A)   Companies should prepare a bank reconciliation statement every week.
B)   A bank reconciliation statement reflects bank account payments and receipts.
C)   A bank statement can be a useful procedure to alert management to any banking anomalies.
D)   Accounting errors are the main reason for a difference between a company's bank account balance reported on its bank statement and the balance reported by its internal accounting system.
E)   If a company has a positive balance in its bank account, in its own accounting records, a credit balance will be reflected for the account "Money at bank".

Question 6

When a hotel prepares its monthly bank reconciliation exercise, bank interest received is:

Accepted Answer

A)   Deducted form the balance appearing on the bank statement.
B)   Added to the hotel's cash receipts record.
C)   Deducted when preparing the bank reconciliation statement.
D)   Added to operating revenue.
E)   None of the above

Question 7

The Highlands Resort hotel maintains a petty cash fund with an imprest balance of $500. At the end of a month there was $180 in the petty cash box and four lunch receipts and vouchers totalling $320. The accounting entry to record the replenishment of the petty cash fund is:

Accepted Answer

A)   Debit Lunch Expenses; Credit Cash at Bank
B)   Debit Petty Cash; Credit Cash at Bank
C)   Debit Lunch Expenses; Credit Petty Cash
D)   Debit Lunch Expenses; Credit Accounts Payable
E)   Debit Accounts Payable; Credit Petty Cash

Question 8

Which of the following statements is true?

Accepted Answer

A)   Under a periodic inventory system, an up-to-date record of the inventory balance is maintained.
B)   If an inventory accounting system were to move from a periodic to a perpetual basis, stock-takes would have to be conducted more regularly.
C)   A perpetual inventory system is generally preferred when accounting for small supply items.
D)   A perpetual inventory system is preferable if a hotel is experiencing an inventory pilferage problem.
E)   None of the above

Question 9

Reasons for a difference between a bank balance recorded on a bank statement and the record in a company's accounting system include:

Accepted Answer

A)   Timing differences, eg, some cheque payments by a company may be late in being presented to the bank.
B)   Errors, eg, an error may be made in recording a deposit amount in the company's accounts.
C)   Bounced cheque, ie, a customer's cheque that has been recorded in a hotel's accounting system might not be honoured by the customer's bank.
D)   Direct deposits to the bank account that have not yet been recorded by the company holding the bank account.
E)   All of the above. E

Question 10

Which of the following statements is untrue.

Accepted Answer

A)   The most effective internal control procedures are preventative.
B)   Internal control procedures can be classified into two main types: 1)  administrative controls, and 2)  accounting controls.
C)   Cash management presents a particularly significant internal control challenge in hotels due to the large number of cash transactions occurring in restaurants and bars.
D)   High staff turnover in hotels increases the need for hotel managers to have an awareness of internal control procedures.
E)   Unlike administrative controls, accounting internal control procedures are primarily concerned with promoting adherence to business policies.

Question 11

On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Accepted Answer

A)   Debit Accounts Payable; Credit Petty Cash
B)   Debit Petty Cash; Credit Cash at Bank
C)   Debit Taxi Expenses; Credit Petty Cash
D)   Debit Taxi Expenses; Credit Accounts Payable
E)   Debit Taxi Expenses; Credit Cash at Bank

Question 12

Which of the following represent internal control principles?

Accepted Answer

A)   Establish clear lines of responsibility
B)   Prepare written procedures
C)   Conduct internal audits
D)   All of the above
E)   B and C

Question 13

Which of the following represent internal control principles?

Accepted Answer

A)   Consolidate responsibility for related transactions
B)   Job rotation
C)   Restricted access to assets
D)   All of the above
E)   B and C

Question 14

Which of the following represent internal control principles?

Accepted Answer

A)   Job rotation
B)   Segregation of duties
C)   Restricted access to assets
D)   All of the above
E)   B and C

Question 15

From your hotel's most recent bank statement, you note that there are two cheque payments that your hotel made to suppliers a week ago for $110 and $140 that have yet to clear the bank account. The bank statement has recorded $13 of interest earned on the account and this has yet to be recorded in your hotel's accounting system. If the bank statement is recording a closing credit balance of $3,480, what should be the pre-reconciliation balance recorded in your hotel's double entry book keeping system with respect to money held at bank?

Accepted Answer

A)   Credit balance of $3,217.
B)   Debit balance of $3,217.
C)   Credit balance of $3,243.
D)   Debit balance of $3,243.
E)   None of the above. B

Question 16

In a bank reconciliation, when the bank statement shows a debit balance, outstanding deposits are:

Accepted Answer

A)   Added to the business records balance
B)   Deducted from the business records balance
C)   Added to the balance as per bank statement
D)   Deducted from the balance as per bank statement
E)   Debited to the bank statement

Question 17

To prepare a bank reconciliation statement it is necessary to have the following:

Accepted Answer

A)   The previous period's bank reconciliation statement.
B)   The company's record of bank account payments and receipts.
C)   A bank statement covering the bank reconciliation period.
D)   The bank account balance per the company's accounting system at the period end.
E)   All of the above.

Question 18

Physical controls do not include:

Accepted Answer

A)   Safe for holding cash
B)   Employee identification cards
C)   Maintenance of a petty cash balance.
D)   Lockable storage areas.
E)   External fencing

Question 19

The imprest system of petty cash accounting refers to:

Accepted Answer

A)   The petty cash being managed by a responsible person.
B)   The petty cash being used to fund small purchases.
C)   The fund being periodically replenished with enough cash to return it to its original balance.
D)   Frequent reconciliations of the petty cash account being made.
E)   None of the above

Question 20

A new internal control procedure should only be implemented if:

Accepted Answer

A)   It is approved by the company's external auditors.
B)   All staff members agree to the new procedure.
C)   It enhances bank reconciliation preparation.
D)   The benefits of the new procedure are expected to be greater than the cost of its implementation.
E)   None of the above

Exam 6: Internal Control

The accounting entries to record the establishment of a petty cash fund are:

Correct Answer
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On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Correct Answer
verified
A

Which of the following statements is untrue?

Correct Answer
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Which of the following does not represent an internal control procedure?

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

When a hotel prepares its monthly bank reconciliation exercise, bank interest received is:

Correct Answer
verified

The Highlands Resort hotel maintains a petty cash fund with an imprest balance of $500. At the end of a month there was $180 in the petty cash box and four lunch receipts and vouchers totalling $320. The accounting entry to record the replenishment of the petty cash fund is:

Correct Answer
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Which of the following statements is true?

Correct Answer
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Reasons for a difference between a bank balance recorded on a bank statement and the record in a company's accounting system include:

Correct Answer
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E

Which of the following statements is untrue.

Correct Answer
verified

On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Correct Answer
verified

Which of the following represent internal control principles?

Correct Answer
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Which of the following represent internal control principles?

Correct Answer
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Which of the following represent internal control principles?

Correct Answer
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Correct Answer
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B

In a bank reconciliation, when the bank statement shows a debit balance, outstanding deposits are:

Correct Answer
verified

To prepare a bank reconciliation statement it is necessary to have the following:

Correct Answer
verified

Physical controls do not include:

Correct Answer
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The imprest system of petty cash accounting refers to:

Correct Answer
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A new internal control procedure should only be implemented if:

Correct Answer
verified

Exam 6: Internal Control

The accounting entries to record the establishment of a petty cash fund are:

Correct AnswerverifiedShow Answer

On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Correct AnswerverifiedA

Which of the following statements is untrue?

Correct AnswerverifiedShow Answer

Which of the following does not represent an internal control procedure?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

When a hotel prepares its monthly bank reconciliation exercise, bank interest received is:

Correct AnswerverifiedShow Answer

The Highlands Resort hotel maintains a petty cash fund with an imprest balance of $500. At the end of a month there was $180 in the petty cash box and four lunch receipts and vouchers totalling $320. The accounting entry to record the replenishment of the petty cash fund is:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Reasons for a difference between a bank balance recorded on a bank statement and the record in a company's accounting system include:

Correct AnswerverifiedE

Which of the following statements is untrue.

Correct AnswerverifiedShow Answer

On 1 July 20X1 the MountainTop hotel established a petty cash fund with an imprest balance of $300. At the end of the month there was $160 in petty cash and four taxi receipts and vouchers totalling $140. The accounting entry to record the replenishment of the petty cash fund is:

Correct AnswerverifiedShow Answer

Which of the following represent internal control principles?

Correct AnswerverifiedShow Answer

Which of the following represent internal control principles?

Correct AnswerverifiedShow Answer

Which of the following represent internal control principles?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

In a bank reconciliation, when the bank statement shows a debit balance, outstanding deposits are:

Correct AnswerverifiedShow Answer

To prepare a bank reconciliation statement it is necessary to have the following:

Correct AnswerverifiedShow Answer

Physical controls do not include:

Correct AnswerverifiedShow Answer

The imprest system of petty cash accounting refers to:

Correct AnswerverifiedShow Answer

A new internal control procedure should only be implemented if:

Correct AnswerverifiedShow Answer

Correct Answer
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A

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E

Correct Answer
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B

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