1) A good system of internal control:
a) Urges adherence to prescribed managerial policies.
b) Insures profitable operations.
c) Eliminates the need for an audit.
d) Requires the use of noncomputerized systems.
e) Is not necessary if the company uses a computerized system.
2) A deposit in transit on last period's bank reconciliation is shown as a deposit on the bank statement this period. As a result, in preparing this period's reconciliation, the amount of this deposit should be:
a) Added to the book balance of cash.
b) Deducted from the book balance of cash.
c) Added to the bank balance of cash.
d) Deducted from the bank balance of cash.
e) Not included as a reconciling item.
3) The Discounts Lost account:
a) Is used with the gross method of recording purchases to highlight the value of purchase discounts taken.
b) Is used with the gross method of recording purchases to highlight the value of purchase discounts available but not taken.
c) Is used to note situations where the accounting department has lost or misplaced paperwork relating to inventory purchases.
d) Is used with the net method of recording purchases to highlight the value of purchase discounts taken.
e) Is used with the net method of recording purchases to highlight the value of purchase discounts available but not taken.