1. DigDug Corporation had outstanding checks totaling $5,470 on its June bank reconciliation. In July, DigDug issued checks totaling $39,600. The July bank statement shows that $27,350 in checks cleared the bank in July. The amount of outstanding checks on DigDug’s July bank reconciliation should be:
2. A firm’s beginning inventory is $39,000, goods purchased during the period cost $124,000, and the cost of goods sold for the period is $144,000. What is the amount of its ending inventory?
3. Etcetera Clothing sold merchandise inventory on account at a price of $19,000 with payment terms of 2/10, n/30. The merchandise cost Etcetera Clothing $15,000. If the customer paid for the merchandise 5 days after receiving the invoice, how much cash was collected by Etcetera Clothing?
4. Cash equivalents are short-term, highly liquid investments purchased within one year of maturity.
5. A small company would have the most difficulty in implementing which of the following internal control principles?
6. If a company hires an auditor to check that the work done by others within the company is supported by documentation, it is doing so under the principle of control activities referred to as:
7. The services provided by banks help businesses to control cash by meeting all of the following control objectives except: