Question

1.Consider the bank reconciliation: A format bank reconciliation is an internal control activity to safeguard cash. How often should a bank reconciliation be performed?

a.Twice a day

b. Once a year, only if the tax accountant requests it be done

c.One a month when the bank statement is received

2. Control activities include:

a. Physical controls and document procedures

b. Segregation of duties and establishment of responsibilities

c.Independent internal verification and human resource controls

d.All three answer choices combined define control activities

3. Both accounts receivable and notes receivable are always created when a sale is made to a customer and both types of receivables automatically charge interest, as part of the transaction. True/ False

4. Which of the following accounts is not considered a current liability?

a.Treasury Stock

b. Salary Payable

c.Sales Tax Payable

d. Interest Payable

5.Depreciation is a process of _____ as it relates to expensing the original cost of the fixed asset over time.

a. fair market value declines

b. Cost allocation

c. Cost accumulation

d. Asset devaluation

6. Happy Inc. uses the double declining methods of depreciation and calculates that the year 1 depreciation to be recorded is $85,000 on a newly purchased piece of equipment.

What journal entry below would correctly record this $85,000 of depreciation expense?

a. Dr. Accumulated Depreciation Cr. Equipment

b. Dr. Depreciation Expense Cr. Equipment

c. Dr. Accumulated Depreciation Cr. Depreciation Expense

d. Dr. Depreciation Expense Cr. Accumulated Depreciation

Answer 1