____ 11. Which one of the following statements is incorrect? a. The accounting f
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Question
____ 11. Which one of the following statements is incorrect?
a.
The accounting function should be separated from the custodianship of a company's assets.
b.
Certain clerical personnel in a company should be rotated among various jobs.
c.
The responsibility of receiving merchandise and paying for it usually should be given to one person.
d.
A company's personnel should given well-defined responsibilities.
____ 12. Which of the following is incorrect?
a.
The operating cycle always is one year in duration.
b.
The operating cycle sometimes is longer than one year in duration.
c.
The operating cycle sometimes is shorter than one year in duration.
d.
The operating cycle is a concept applicable both to manufacturing and retailing enterprises.
____ 13. When the allowance method of recognizing bad debt expense is used, the entry to record the write-off of a specific uncollectible account would decrease
a.
allowance for doubtful accounts.
b.
net income.
c.
net realizable value of accounts receivable.
d.
working capital.
____ 14. On January 1, 2014, Kyle Corporation established a petty cash fund of $400. On December 31, 2014, the petty cash fund was examined and found to have receipts and documents for miscellaneous expenses amounting to $364. In addition, there was cash amounting to $44. What entry would be required to record replenishment of the petty cash fund on December 31, 2014?
a.
Petty Cash.................... 364
Cash Short and Over......... 8
Cash........................ 356
b.
Miscellaneous Expense......... 364
Cash Short and Over......... 8
Petty Cash.................. 356
c.
Miscellaneous Expense......... 364
Cash Short and Over......... 8
Cash........................ 356
d.
Miscellaneous Expense......... 356
Cash Short and Over......... 8
Cash........................ 364
____ 15. In preparing a bank reconciliation, interest paid by the bank on the account is
a.
added to the bank balance.
b.
subtracted from the bank balance.
c.
added to the book balance.
d.
subtracted from the book balance.
a.
The accounting function should be separated from the custodianship of a company's assets.
b.
Certain clerical personnel in a company should be rotated among various jobs.
c.
The responsibility of receiving merchandise and paying for it usually should be given to one person.
d.
A company's personnel should given well-defined responsibilities.
Explanation / Answer
Ans. 11 C The responsibility of receiving merchandise and paying for it usually should be given to one peson. Ans. 12 A The operating cycle always is one year in duration. *There is no limitation of time in operating cycle period, it may be longer or shorter than one year. Ans. 13 A Allowance for doubtful accounts Ans. 14 C Micellaneous expense 364 Cash short and over 8 Petty cash 356 *Petty cash (400 - 44) = 356 Ans. 15 C added to the book balance.
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