Question 1

The bonding of employees is an example of which feature of a good system of internal control?

Accepted Answer

Sound personnel policies, such as promoting bonding among employees, can contribute to a positive work environment and help prevent fraud or other unethical behavior. However, it is not directly related to any of the other options presented.

Question 2

A very small company would have the most difficulty in implementing which of the following internal control activities?

Accepted Answer

Separation of duties requires having different employees responsible for different aspects of a task or process, which may not be feasible in a very small company with limited staff. The other options are still important for internal control even in small companies.

Question 3

On June 3,Win-Tel Company sold merchandize worth $800 on credit,terms 2/10,n/30.The merchandize sold had cost $550.The customer paid the amount on June 15. What is the required journal entry to record the payment received under the periodic inventory system?

Accepted Answer

The payment was made after the discount period, so the full amount of $800 is received.

Question 4

On June 3,Maryland Company purchased merchandize worth $800 on credit,terms 2/10,n/30.The amount paid on June 10.What is the required journal entry to record the payment under the periodic inventory system?

Accepted Answer

The payment is made within the discount period, so the company takes a 2% discount on $800, which is $16. The journal entry debits Accounts Payable for the full amount of $800, credits Purchases Discounts for $16, and credits Cash for the net amount paid, $784.

Question 5

Each of the following is a feature of internal control except

Accepted Answer

Management compensation packages are not a feature of internal control. Internal control refers to the systems and procedures in place to safeguard assets, ensure accurate financial reporting, and prevent fraud. Limited access to assets, periodic independent verification, and authorization of transactions are all important features of internal control.

Question 6

Chancellor Company purchased merchandize worth $900 on credit,terms n/30 and returned merchandize worth $100 on next day.What is the required journal entry to record the merchandize returns under the periodic inventory system?

Accepted Answer

Under the periodic inventory system, returns are recorded by debiting Accounts Payable and crediting Purchases Returns and Allowances.

Question 7

Use this information to answer the following question. Chupka Company experienced the following events during the period:
1. A tabulation of invaices at the end of the day showed \$80] in MasterCard invoices, which were deposited in a bank account at fall value less a 5 percent discaunt.
2. Made a sale an American Eagies5 card far 400 and mailed invoice to American Eagress for payment. The discount charged by American Bagges5 is 4 percent. The entry to record transaction 1 would include an increase in

Accepted Answer

The answer of Use this information to answer the following...

Question 8

Feathertouch Company sold merchandize worth $800 on credit,terms n/15.The merchandize sold had cost $550.What is the required journal entry to record the transaction and to transfer the cost of merchandize inventory to cost of goods sold under the periodic inventory system?

Accepted Answer

Under the periodic inventory system, no entry is made to transfer the cost of merchandise inventory to cost of goods sold at the time of sale. The entry to record the sale on credit is to debit Accounts Receivables and credit Sales.

Question 9

Each of the following is a feature of internal control except

Accepted Answer

Television commercials to enhance marketability are not a feature of internal control. Internal control refers to the policies and procedures implemented within an organization to ensure that its objectives are achieved efficiently and effectively. The other choices - sound personnel policies, recording of all transactions, and separation of duties - are all features of internal control as they help to prevent errors and fraud, promote accurate accounting records, and ensure that no single employee has full control over a transaction from start to finish.

Question 10

Internal control is weakened by all of the following except

Accepted Answer

Separation of duties strengthens internal control by ensuring that no one person has complete control over a transaction from start to finish. Collusion, human errors, and the effects of changing conditions can all weaken internal control.

Question 11

On June 3,Maryland Company purchased merchandize worth $800 on credit,terms 2/10,n/30.The amount paid on June 15.What is the required journal entry to record the payment under the periodic inventory system?

Accepted Answer

The answer of On June 3,Maryland Company purchased merchandize worth...

Question 12

Which of the following attributes of internal control would be violated if the accounting clerk wrote checks to pay accounts payable?

Accepted Answer

Separation of duties is the attribute of internal control which would be violated if the accounting clerk wrote checks to pay accounts payable. This is because the same person would be responsible for both recording and authorizing payments, which increases the risk of fraud or errors. In order to ensure proper internal control, these functions should be separated and different employees should be responsible for each of them.

Question 13

A consequence of a separation of duties is that

Accepted Answer

The answer of A consequence of a separation of duties...

Question 14

Which of the following is not a primary concern of internal control?

Accepted Answer

The answer of Which of the following is not a...

Question 15

A retailer accepted Visa charge sales totaling $500 and deposited the charge slips in the bank.Assuming a credit card discount expense of 4 percent,what would be the increase to Cash and the increase to Sales,respectively?

Accepted Answer

The answer of A retailer accepted Visa charge sales totaling...

Question 16

Which of the following would not be found in a good system of internal control?

Accepted Answer

Having one person handle all the responsibilities of a department undermines the checks and balances system and increases the risk of fraud or errors going undetected. All other options contribute towards a good system of internal control.

Question 17

A traditional definition of internal control specifically includes all of the following features except

Accepted Answer

A traditional definition of internal control includes adherence to prescribed managerial policies, promotion of operational efficiency, and reliability of accounting data. However, maintenance of a clean and safe workplace is not typically included in this definition.

Question 18

On June 3,Win-Tel Company sold merchandize worth $800 on credit,terms 2/10,n/30.The merchandize sold had cost $550.The customer paid the amount on June 10. What is the required journal entry to record the payment received under the periodic inventory system?

Accepted Answer

The answer of On June 3,Win-Tel Company sold merchandize worth...

Question 19

All of the following are examples of internal control activities except

Accepted Answer

Company picnics for all employees do not relate to internal control activities. The other options, rotation of key personnel, bank reconciliations, and insistence that employees take earned vacations are all examples of internal control activities.

Question 20

Use this information to answer the following question. Chupka Company experienced the following events during the period:
1. A tabulation of invoices at the end of the day showed \$800 in Mastercard invaice5, which were deposited in a bank account at full value less a 5 percent discount.
2. Made a sale on American Eaxiess card for 400 and mailed invaice to American Eagress for payment. The discount charged by American Eagaress is 4 percent. The entry to record transaction 2 would include a(n)

Accepted Answer

Transaction 2 involves a sale of merchandise on credit for $400. Therefore, there will be an increase in Sales for $400. Choice A and D are incorrect because there is no mention of a decrease in cash or an increase in accounts receivable. Choice C is incorrect because there is no mention of a credit card expense.

Quiz 5: The Operating Cycle and Merchandising Operations

The bonding of employees is an example of which feature of a good system of internal control?

A very small company would have the most difficulty in implementing which of the following internal control activities?

On June 3,Win-Tel Company sold merchandize worth $800 on credit,terms 2/10,n/30.The merchandize sold had cost $550.The customer paid the amount on June 15. What is the required journal entry to record the payment received under the periodic inventory system?

On June 3,Maryland Company purchased merchandize worth $800 on credit,terms 2/10,n/30.The amount paid on June 10.What is the required journal entry to record the payment under the periodic inventory system?

Each of the following is a feature of internal control except

Chancellor Company purchased merchandize worth $900 on credit,terms n/30 and returned merchandize worth $100 on next day.What is the required journal entry to record the merchandize returns under the periodic inventory system?

Feathertouch Company sold merchandize worth $800 on credit,terms n/15.The merchandize sold had cost $550.What is the required journal entry to record the transaction and to transfer the cost of merchandize inventory to cost of goods sold under the periodic inventory system?

Each of the following is a feature of internal control except

Internal control is weakened by all of the following except

On June 3,Maryland Company purchased merchandize worth $800 on credit,terms 2/10,n/30.The amount paid on June 15.What is the required journal entry to record the payment under the periodic inventory system?

Which of the following attributes of internal control would be violated if the accounting clerk wrote checks to pay accounts payable?

A consequence of a separation of duties is that

Which of the following is not a primary concern of internal control?

A retailer accepted Visa charge sales totaling $500 and deposited the charge slips in the bank.Assuming a credit card discount expense of 4 percent,what would be the increase to Cash and the increase to Sales,respectively?

Which of the following would not be found in a good system of internal control?

A traditional definition of internal control specifically includes all of the following features except

On June 3,Win-Tel Company sold merchandize worth $800 on credit,terms 2/10,n/30.The merchandize sold had cost $550.The customer paid the amount on June 10. What is the required journal entry to record the payment received under the periodic inventory system?

All of the following are examples of internal control activities except