ACCOUNTING 201 EXAM QUESTIONS WITH CORRECT ANSWERS LATEST UPDATE 2026
The principles of internal control include _____. - Answers establish responsibilities
An internal control system consists of the policies and procedures managers use to _____.
-ensure reliable accounting
-protect assets
-promote efficient operations
-uphold company policies
-all of the above - Answers all of the above
An effective system of internal control _____. - Answers helps protect company assets
The Sarbanes-Oxley Act _____. - Answers requires managers of public companies to document and
assess the effectiveness of all internal control processes that impact financial reporting
Separation of duties _____. - Answers divides responsibility for a transaction between two or more
individuals
The company's balance sheet on September 30, reflects cash and cash equivalents of _____. -
Answers $109,500
Currency and coins on hand of $12,500 + Checking account balance of $35,000 + Customer checks on
hand (not yet deposited) of $2,000 + Money market fund balance of $50,000 + Investment in 3-month
U.S. Treasury bills of $10,000 = Total cash and cash equivalents of $109,500. The investment in
Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term,
highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close
to its due date so that its market value is not sensitive to interest rate changes.
Cash management principles include all of the following except _____. - Answers maximize other
assets
At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of
cash sales for the day. However, when the clerk and the supervisor count the cash in the register, the
count reveals that $1,050 was actually collected from customers. Complete the following journal
entry by selecting the account names and dollar amounts from the drop-down menus. - Answers (D)
Cash $1050
(D) Cash Over and Short $9
(C)Sales $1059
All of the following statements regarding a voucher system are incorrect except _____.
-all companies use the same standardized voucher system
-an invoice approval initiates the recording of a purchase
-for control purposes, department managers may place orders directly with suppliers in a well-
designed voucher system
-a voucher system is commonly used in small companies to compensate for the lack of other internal
controls
-a well-designed voucher system will prevent all errors and fraud - Answers an invoice approval
initiates the recording of a purchase
On February 1, Derrick Company establishes a $200 petty cash fund. Complete the seller's necessary
journal entry by selecting the account names and dollar amounts from the drop-down menus. -
Answers (D) Petty Cash $200
(C) Cash $200
Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15, when the
fund balance reached $7, the petty cash custodian prepared a petty cash report that summarized
receipts for postage ($140) and printing ($54). Complete the seller's necessary journal entry by
selecting the account names and dollar amounts from the drop-down menus. - Answers (D) Printing
Expense $140
(D) Postage Expense $54
(C) Cash Over and Short $1
(C) Cash $193
Because its petty cash fund was depleted so quickly, on February 16, Derrick Company decided to
increase the petty cash fund from $200 to $350. Complete the seller's necessary journal entry by
selecting the account names and dollar amounts from the drop-down menus. - Answers (D) Petty
Cash $150
The principles of internal control include _____. - Answers establish responsibilities
An internal control system consists of the policies and procedures managers use to _____.
-ensure reliable accounting
-protect assets
-promote efficient operations
-uphold company policies
-all of the above - Answers all of the above
An effective system of internal control _____. - Answers helps protect company assets
The Sarbanes-Oxley Act _____. - Answers requires managers of public companies to document and
assess the effectiveness of all internal control processes that impact financial reporting
Separation of duties _____. - Answers divides responsibility for a transaction between two or more
individuals
The company's balance sheet on September 30, reflects cash and cash equivalents of _____. -
Answers $109,500
Currency and coins on hand of $12,500 + Checking account balance of $35,000 + Customer checks on
hand (not yet deposited) of $2,000 + Money market fund balance of $50,000 + Investment in 3-month
U.S. Treasury bills of $10,000 = Total cash and cash equivalents of $109,500. The investment in
Microsoft common stock does not meet the criteria for a cash equivalent, which is a short-term,
highly liquid investment asset that is readily convertible to a known cash amount and sufficiently close
to its due date so that its market value is not sensitive to interest rate changes.
Cash management principles include all of the following except _____. - Answers maximize other
assets
At the end of business on September 1, the total displayed on the cash register tape shows $1,059 of
cash sales for the day. However, when the clerk and the supervisor count the cash in the register, the
count reveals that $1,050 was actually collected from customers. Complete the following journal
entry by selecting the account names and dollar amounts from the drop-down menus. - Answers (D)
Cash $1050
(D) Cash Over and Short $9
(C)Sales $1059
All of the following statements regarding a voucher system are incorrect except _____.
-all companies use the same standardized voucher system
-an invoice approval initiates the recording of a purchase
-for control purposes, department managers may place orders directly with suppliers in a well-
designed voucher system
-a voucher system is commonly used in small companies to compensate for the lack of other internal
controls
-a well-designed voucher system will prevent all errors and fraud - Answers an invoice approval
initiates the recording of a purchase
On February 1, Derrick Company establishes a $200 petty cash fund. Complete the seller's necessary
journal entry by selecting the account names and dollar amounts from the drop-down menus. -
Answers (D) Petty Cash $200
(C) Cash $200
Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15, when the
fund balance reached $7, the petty cash custodian prepared a petty cash report that summarized
receipts for postage ($140) and printing ($54). Complete the seller's necessary journal entry by
selecting the account names and dollar amounts from the drop-down menus. - Answers (D) Printing
Expense $140
(D) Postage Expense $54
(C) Cash Over and Short $1
(C) Cash $193
Because its petty cash fund was depleted so quickly, on February 16, Derrick Company decided to
increase the petty cash fund from $200 to $350. Complete the seller's necessary journal entry by
selecting the account names and dollar amounts from the drop-down menus. - Answers (D) Petty
Cash $150
