Bookkeeping for Small Business Question and answers rated A+ 2024
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Course
Bookkeeping
Institution
Bookkeeping
Bookkeeping for Small Business Question and answers rated A+ 2024 Bookkeeping for Small Business, Bookkeeping, Maintaining a Bookkeeping System, Bookkeeping (Quiz #1)
1. Each accounting transactions begins with some type of source document, which differs depending on the type of transaction. Wh...
Bookkeeping for Small Business,
Bookkeeping, Maintaining a
Bookkeeping System, Bookkeeping
(Quiz #1)
1. Each accounting transactions begins with some type of source document,
which differs depending on the type of transaction. Which source document is
not a purchases source document?
Incorrect
A) Vendor invoices
B) Purchase orders
C) Packing slips
D) Sales orders
E) Receiving reports - correct answer ✔D) Sales orders
2. Which internal control involves allocating bookkeeping tasks among
personnel so that one individual does not have the ability to make an
accounting error (either intentionally or unintentionally) and also cover it up?
This principle implies that the person with physical access to cash or other
moveable assets (investments or inventory) should not also be involved with
the related record keeping.
Incorrect
A) Segregation of duties
B) Restricted access
C) Document controls
D) Processing controls
E) Reconciliation controls - correct answer ✔A) Segregation of duties
,3. Which cash receipts system keeps details of only the current period's
activity and groups all other open items into a single beginning balance
amount?
Incorrect
A) Open item system
B) Balance Forward system
C) Order-entry system
D) Point of sale system - correct answer ✔B) Balance Forward system
4. Which of the following is not a recommendation for controlling and
safeguarding receipts when processing mail receipts?
Incorrect
A) The company should assign someone with no other cash receipt or
processing
B) The secretary or receptionist opening the mail should separate customer
C) The secretary or receptionist should forward the actual checks to
accounting
D) The secretary or receptionist should prepare the original deposit slip along
with a - correct answer ✔C) The secretary or receptionist should forward the
actual checks to accounting
5. The bank statement reconciliation process is a very effective after-the-fact
internal control tool. Moreover, the process is crucial to many small
businesses since their accounting systems are often cash-driven. Which of
the following statements regarding the bank statement reconciliation process
is false?
Incorrect
A) The bank statement reconciliation helps detect errors (both the company's
and
,B) The bank statement reconciliation reveals bank debits and credits that
have not
C) The bank statement reconciliation should be performed by someone with
other
D) The bank statements should be received by the person responsible for
receiving - correct answer ✔C) The bank statement reconciliation should be
performed by someone with other
6. Reconciling the accounts receivable subsidiary ledger (or aged trial
balance) to the accounts receivable account in the general ledger is crucial to
most small businesses. If differences between the aged trial balance and
subsidiary ledger are not resolved, either the company's financial statements
or billing statements mailed to customers (or both) are misstated. If
differences go back beyond the current month, locating and resolving the
individual differences becomes increasingly difficult and time-consuming.
Which of the following statements is false?
Incorrect
A) Small businesses can gain some assurance that cash receipts journals and
sales journals were posted to the general ledger by recalculating the accounts
receivable general ledger balance.
B) Accounting persons recalculate the ending general ledger balance by
starting with the beginning general ledger balance, subtracting totals per the
sales journals, - correct answer ✔B) Accounting persons recalculate the
ending general ledger balance by starting with the beginning general ledger
balance, subtracting totals per the sales journals, adding totals per the cash
receipts journals, and adjusting for any other transactions posted to the
general ledger.
7. Which of the following is not a processing and recording purchases activity?
Incorrect
A) Processing invoices
B) Recording invoices in the accounting system
, C) Disbursing cash
D) Bank reconciliation - correct answer ✔D) Bank reconciliation
8. After the accounting staff has completed the initial invoice processing
(received the invoice, obtained approval for its payment, and updated the
vendor information), the staff performs clerical processes to record the
purchases in the accounting records. Which of the following statements is
false?
Incorrect
A) Traditionally, the bookkeeper performed calculations to determine the
clerical accuracy of the invoice. With the advent of computer prepared
invoices, recalculating invoices is no longer necessary.
B) The accounting staff must assign accounting codes to each invoice to
record the transaction in the form a computer will understand. Because
detecting and correcting a miscoded transaction is often difficult and time-
consuming, the staff should take extra care to ensure the initial transaction
coding is correct.
C) When coding invoices, accounting staff may encounter transactions that
require the establishment - correct answer ✔A) Traditionally, the bookkeeper
performed calculations to determine the clerical accuracy of the invoice. With
the advent of computer prepared invoices, recalculating invoices is no longer
necessary.
9. After recording vendor invoices in the accounting system, the bookkeeper is
ready to pay the invoices. The bookkeeper has two major activities when
disbursing cash: 1. selecting the invoices to pay, and 2. issuing checks.
During these activities, the bookkeeper's concerns include taking full
advantage of the vendor's credit terms and protecting the business's cash
from misuse. Which of the following statements regarding these two activities
is false?
Incorrect
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