Bookkeeping for Small Business Questions With Solutions 100% Correct
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Course
Bookkeeping
Institution
Bookkeeping
Bookkeeping for Small Business Questions
With Solutions 100% Correct
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) Purch...
Bookkeeping for Small Business Questions
With Solutions 100% Correct
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 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
, Bookkeeping for Small Business Questions
With Solutions 100% Correct
C) Document controls
D) Processing controls
E) Reconciliation controls 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 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
, Bookkeeping for Small Business Questions
With Solutions 100% Correct
D) The secretary or receptionist should prepare the original deposit slip along with a 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 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
, Bookkeeping for Small Business Questions
With Solutions 100% Correct
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, 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 D) Bank reconciliation
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